Wellness programs lower insurance premiums

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Losing weight or quitting smoking can save you big bucks on health insurance premiums and even land you a flat-panel TV.

With the nation entrenched in an obesity epidemic and millions of Americans suffering from chronic diseases, a host of companies around the country are offering employee wellness programs that reward workers when they take steps toward a healthier lifestyle. For the corporations, these programs can save hundreds of thousands of dollars in health care costs. For employees, participating in a wellness program reduces health insurance premiums, saves money on medical costs and can even get you points to redeem for merchandise.

Wellness programs mean spending less on medical costs

The goal of wellness programs is for employees to become healthier. Because they are healthier, the employees end up spending less for doctors, hospitals and prescription drugs, says Paul Sollitto, chief financial officer at EngagementHealth, a Lombard, Ill.-based company that designs and manages wellness programs. Their life expectancy improves, meaning more years in the work force and more time to earn money.

According to Linda Lulli, associate vice president for human resources at Bryant University in Smithfield, R.I., which offers a wellness program, an inactive person spends $1,500 extra on health costs per year.

Lose weight on the company’s dime

Wellness programs vary from company to company but generally start out with a health risk assessment. The assessment will evaluate the employees’ current health and their risk of developing a chronic illness like diabetes. It typically comes with an incentive for taking it, such as a decrease in health insurance premiums, reward points to purchase merchandise or cash.

Employees who don’t participate in the assessment may face penalties such as paying a higher premium or not having access to a cheaper, better plan, says Jerry Ripperger, director of business development for The Principal Financial Group in Des Moines, Iowa, which coordinates wellness programs for other firms. He says it’s not uncommon for an employee to save $10 to $15 on each biweekly paycheck on health insurance for participating in a wellness program for a yearly savings of $390.

The program that Principal offers companies includes weight loss plans, nutrition coaching and smoking cessation programs. Employers are encouraged to give health risk screenings annually to track progress.

Given the high recidivism rate in some of the programs, most companies are encouraged to reward employees for taking action even if they don’t succeed, such as those in a smoking cessation program who can’t kick their smoking habit entirely, Ripperger says.

Participate in wellness programs, get a TV or iPod

Health insurance premium discounts and reductions in co-payments are the most popular incentives that employers are giving, but they aren’t the only options.

Vitality Group, the Chicago unit of South Africa-based Discovery Holdings Ltd., has a wellness program used by corporations that rewards a company’s employees with points for use in the Vitality shopping mall.

“Our model includes more than 35 activities that all have varying point values,” says Arthur Carlos, chief executive officer of Vitality Group.

For instance, working out at a health club will result in fewer points than successfully completing a smoking cessation program. “People can get rewards ranging from an iPod to a flat-screen TV,” Carlos says. The Vitality mall, where only points can be redeemed, has 2.2 million items.

While the employee is the main focus of wellness programs, many companies extend it to the employee’s family. After all, a sick family can result in increase absenteeism, slowing down employee productivity. First Lady Michelle Obama, who is fighting childhood obesity with her “Let’s Move” campaign, says the U.S. spends $150 billion a year on treating obesity and related problems.

LifeCare of Shelton, Conn., which has implemented wellness programs in 11 companies across the country, urges all the family members to get involved and sends out fliers to employees’ homes to inform spouses of the program. LifeCare’s programs, which are focused on physical, emotional and financial health, boast 55 percent to 65 percent participation. LifeCare Chief Executive Peter Burki says incentives are a big part of the reason employees join the wellness programs.

“There are a variety of incentive awards,” says Burki. “In some instances, it’s a reduction in insurance premiums and medical co-payments. With other organizations, it’s reimbursement or complete payment for gym memberships and yoga classes. Some organizations make contributions to flexible spending accounts and some do free wellness screening on site.”

Wellness programs save employees’ money, but they do require a commitment. They also require time. But at the end of the day, being healthier will improve your life and not just your wallet.