Making Wellness Work for Small Business
Mark Housley offers extra stock options to any of the 50 employees who sign up the wellness program sponsored by his Silicon Valley energy technology company.
And in Cripple Creek, Colo., any of the 48 employees at the Myron Stratton Home for the elderly get reduced deductibles in their health insurance if they sign up for a wellness program.
When most small business owners think of initiating a wellness program to help employees lose weight or stop smoking, they conclude it’s a luxury they can’t afford.
Others have concluded they can’t afford not to.
While large corporations can prove statistically that their employees log fewer sick days and health insurance claims as the result of wellness programs, small employers tend to be motivated more by altruism, said Gary Piantedosi, managing partner at Stamford, Conn.-based Creative Benefits Planning.
“Quantifying a return on investment for wellness programs with a small group of employees is virtually impossible,” Piantedosi said. “Research shows that unless you have 10,000 employees enrolled in a wellness program, it will be very challenging for you to figure out your return on investment. Even with that sized group, it will take three to five years.”
Instead, Piantedosi uses the term “VOI – value on investment,” when he talks to small business owners about wellness.
“It’s simply logical that if you try to make your employees healthier, the best outcome will be healthy employees with less absenteeism, disabilities or chronic conditions,” he said. “It’s one more tool that shows they care about their employees.”
Double-digit annual increases in health care premiums have caused many employers to drop health care for their employees altogether. Others are forced to increase employee deductibles, co-pays and premiums to keep pace with rocketing health care costs. Some have turned to wellness programs as a preventive measure.
Programs usually offer weight-loss regimes, smoking-cessation programs and advice on stress management, exercise, diet and fitness. But the end result of fewer sick days, heightened productivity and fewer costly insurance claims has been hard to quantify, especially for cash-strapped small businesses.
When companies first began experimenting with “passive” wellness programs nearly 20 years ago, employees were encouraged to enroll for their own good. But many employees resented being told what to do, and those who did sign up didn’t last long. According to the Employee Benefits Institute of America, there is a 70 percent jump in wellness program participation when incentives are offered, said Burton Goldfield, chief executive of TriNet, a San Leandro, Calif., company that provides human-resources services to small businesses.
Enter firms like Brenda Givens’ SlimKinetic, a Silicon Valley corporate wellness firm that designs programs for the horde of tech firms there, usually offering stock options as an incentive to participate.
“Small companies are underserved because it’s harder for them to afford [wellness programs],” Givens said. “There are a lot of fast-growing tech firms here that use stock options to attract top talent, but [tying wellness programs] to stock options is something no one’s tried.”
Even smaller firms tell her they’d like to offer a wellness program but can’t afford one, Givens suggests “a cafeteria approach, start small and build as you see results.”
Piantedosi said a baseline wellness program for small employers costs about $2.50 per employee per month. For that, each employee gets a health assessment of body weight, blood pressure, cholesterol and other factors. Then comes a web portal with password protection for each employee. Each can tap into online health assessments, monthly campaigns and goals and an online medical library. A tracking system measures progress for individual campaigns such as weight loss or smoking cessation. There’s an 800-number to call a health coach for advice.
Givens’ SlimKinetics set up the program for Vigilent, Housley’s firm.
“Employee health should be a performance measure that companies should look at, just like sales quotas, and should be rewarded just like any other,” she said.
A good business strategy is one that accounts for many purposes, said Housley, Vigilent’s chief executive. “We’re not just doing a job here, we’re building something of value. A healthier team improves the value of the business and the more closely the interests of the employee are aligned with those of the owner, the more valuable the property, I think.”
Housley sees his employees’ wellness as a competitive advantage, Givens said. “He can’t afford to have anyone out sick. Everyone is too valuable. In a small company everyone makes a difference, and keeping them productive is the most important result of a wellness program.”
Lisa Bailey’s firm, Health Promotions Management in Broomfield, Colo., has been in the wellness business for nearly 28 years. The Myron Stratton home has been a client for four years.
They came to Bailey because they wanted to contain health care costs without impacting employees with increased co-pays, deductibles or premiums. Each year, HPM sets up new goals and programs. If an employee participates in three of six, and gets an annual health screening, their deductible is cut in half.
As a result, said Bailey, the rise in claims is down; just 4.7 percent annually, compared to an average 15 percent before the program began. In addition, 77 percent of the employees reduced their deductibles and 40 percent exceeded the minimum level of participation.
“Cash is king,” Bailey said. “By tying participation to premiums, they’ve moved the needle on health care costs and productivity. When health risks among your employees decrease, a decrease in health care costs will follow.”
Employees are tuning into their health who weren’t before, said Mark Turk, executive director of the Myron Stratton Home. “We’ve been able to contain health-care costs without increasing contributions or changing our benefit design. And we’ve experienced a positive impact on employee morale.”
Piantedosi thinks it’ll take 20 years for employers to integrate wellness programs with other standard benefits.
“It took 40 years for the percentage of people who smoke to drop significantly, even though we’ve long known the benefits of quitting,” he said.
But the migration is inevitable, Piantedosi added.
“We as a nation spent $2.6 trillion on health care last year and half of that went to treating chronic conditions, many of which could have been prevented by better lifestyle choices,” he said. “It’s not going to take too long in this cash-strapped environment for people to realize that if we can control chronic conditions we can save a boatload of money.”