Employer Healthcare Insights
A Comprehensive Guide to Employee Health & Wellness
Every HR professional, company president, and CEO can tell you that healthy employees are a good thing. But why? How does having healthy employees impact your company’s bottom dollar and what can employers do to keep everybody healthy?
This comprehensive guide to employee health and wellness will answer those questions and dive into the following topics:
An employee that takes their health and wellness seriously will exemplify many traits that are extremely valuable to an employer. A healthy employee will typically have a positive outlook and retain energy throughout the day and week. They are hard-working and will be highly productive members of their team. They tend to be more confident and carry around less stress than unhealthy employees. These traits typically attract the attention of others around them, so they may also have a positive impact on other employees.
Employees that take their personal health and wellness seriously are typically also good at goal-setting and follow-through; they know the importance of being committed to a process. They understand what personal success looks like as well as how to handle failure. Physically, healthy employees come in all shapes and sizes so it will take more than an external look to determine if an employee is healthy or not.
Companies should be fully invested in the health of their employees as they will see returns on that investment. A healthy employee will be a high-performing contributor that is committed to their own personal success as well as the success of the organization. They will typically be dedicated to continuous learning and self-improvement, and they will likely be good candidates to move up quickly through the ranks. They tend to exist at higher levels of productivity as well as achievement. With this being the case, if you employ and retain more healthy employees, your company’s overall productivity and attainment results will rise while the cost of healthcare coverage declines.
A 2009 study from the Centers for Disease Control established that unhealthy lifestyle behaviors are responsible for most chronic diseases. These diseases cause approximately 7 out of every 10 deaths and up to 75% of all healthcare costs. Low levels of physical activity, unhealthy diets, and smoking are directly responsible for 70-90% of chronic diseases. Chronic condition treatment accounts for 81% of hospital admissions, 91% of all prescriptions filled, and 76% of all doctor visits. Therefore, reducing the number of chronic conditions employees face will directly affect a company’s healthcare costs. Because these conditions are primarily caused by unhealthy lifestyle choices, they are somewhat preventable through employee wellness initiatives.
There are many ways that healthy employees will save a company money. Lower rates of chronic illness result in less doctor appointments, urgent care visits, and hospitalization, which will all drastically reduce healthcare expenditures. Healthy employees will get sick less often so they won’t need to take as many days off. Physically fit employees are less likely to be injured on the job which means lower workers compensation costs.
A fairly obvious contributor to increased productivity in healthy employees is reduced absenteeism. Healthy employees are simply less likely to get sick or injured, requiring less time away from work for those reasons. Unlike absenteeism, which is highly visible and trackable, presenteeism may be much harder to visibly recognize and therefore much more difficult to combat.
Presenteeism is a rather newly defined concept and is when an employee is physically at work, but not fully able to perform their job duties. Dr. Steve Aldana claims some of the most likely causes of presenteeism are depression (131%), neck/back pain (79%), and unhealthy eating habits (66%). According to a study of 10 chronic conditions, presenteeism costs were higher than medical costs in most cases, and represented 18% to 60% of all costs. Presenteeism can also have rippling effects in the form of workplace epidemics.
Unhealthy employees will have much lower rates of presenteeism due to poor health or pain issues. Offering employees ways to change positions and move during the workday can help in this regard. Providing stand-up option desks or balance balls to sit and stretch on, as well as excellent ergonomic office furniture can all help reduce chronic pain and increase productivity.
A focus on employee health and wellness can exponentially increase on the job safety and satisfaction. Both prospective and current employees appreciate working for a company that offers good benefits which demonstrate that their employers respect and care about their health and well-being. Additionally, healthy employees are typically happier, and happiness is contagious. Happy, appreciative employees are more likely to refer additional people to work for your company and word-of-mouth is one of the strongest recruiting avenues available.
On that note, prospective employees expect companies to offer attractive, competitive healthcare benefits. With unemployment rates currently below 4%, in order to even get a second glance, you’ll need to offer the basics; great healthcare benefits, 401K match, and abundant PTO. Companies need to be creative to pull in the top talent. A comprehensive wellness program could be a differentiator that allows a company to stand out. Employees that are looking specifically for good wellness benefits tend to be more healthy coming in and therefore able to maintain their health and wellness utilizing your programs.
Along with having the ability to attract more talent, a successful wellness program could help increase your retention rates of current employees. 45% of employees working at small to medium-size companies say they would stay at their jobs longer because of their employers’ wellness programs. Lowering your turnover can carry massive financial benefits for your company. Research by SHRM suggests that the cost to replace an employee can be as high as 50%-60% of salary for mid-level workers with overall costs ranging anywhere from 90%-200% for high-level management and executive roles. Employee wellness experts at Wellsteps claim an effective employee wellness program can cost between $36 and $90 per employee per year, with some of the most comprehensive options being just over $1,000 per year.
There are many options to consider around what kinds of health and wellness services to offer to employees. You could build a gym or pool, bring in a masseuse, staff an on-site clinic, offer yoga classes, provide risk screenings… One of the greatest things to understand in this regard is you can always start small and expand once you start seeing returns such as increased employee satisfaction and productivity. We’ve covered a few options below in order to help get you started.
The National Association of Worksite Health Centers defines an onsite clinic as a setting where an employer offers one or more medical and wellness services, delivered by licensed providers, to all or a designated portion of its employees and their dependents. These employer-provided clinics are typically either within the workplace (onsite) or very easily accessible within a close range to the workplace (near-site). In the beginning, onsite clinics were formed to provide first aid for on-the-job injuries or emergencies. Many onsite clinics today have expanded into becoming a primary form of care, offering everything from health screenings to condition management and prescriptions.
Employees who are offered access to onsite clinics are able to see their providers more regularly because of their close proximity to work and lower wait times. These clinics are designed with the value of care and cost-savings in mind for both the employer and employee, so even as a patient receiving higher quality, more frequent, preventative care, employees will also be saving money compared to most traditional healthcare options.
An onsite clinic fits well into an overall focus on employee health and wellness as it provides a consistent means to educate employees on their health through free health risk assessment screenings and educational fairs or presentations. It is also an excellent benefit to highlight when recruiting. A Paladina Health study found that when incorporating an onsite clinic, companies saw a 59% increase in attraction and retention of employees.
Learn more about onsite clinics with our Ultimate Guide to Onsite Clinics – get it here.
Employee wellness covers many aspects of an individual’s complete health outlook such as ability to eat well, get enough rest, be physically fit and comfortable, be aware of warning signs for health issues, and more. It’s highly beneficial to an employer to ensure employees are able to focus on their physical and mental wellbeing. The American Journal of Health Promotion found 25% lower sick leave and health plan costs and a 32% decrease in workers’ compensation and disability insurance costs among companies that offered wellness programs to their employees.
When it comes to workplace wellness programs, there is a massively wide variety of offerings focused on different ways to help employees become and remain active, healthy, and happy. Some companies get really creative and have a lot of fun with these programs. For instance, e-commerce giant Zappos addresses the importance of getting enough rest by offering a nap room called Sleeping with the Fishes that includes an aquarium and top-of-the-line massage chairs that lay all the way flat so you can stare up at the fish as you doze off. Centro offers onsite yoga and 10 “Ferris Bueller days”, meaning employees can play hooky on those days with no questions asked.
Because wellness offerings and ideas vary so widely, it can be hard to know where to start. Laura Linnan, a professor of public health at the University of North Carolina Chapel Hill and head of the former CDC-funded Workplace Health Research Network, created a set of guidelines for creating a comprehensive wellness program.
It can be difficult for full-time employees to find time and energy to focus on their fitness. 86% of American workers sit all day at their job. Add to that the average work commute (just under 30 minutes each direction) plus the amount of time people spend sitting once they are home and it averages out to about 12 hours of sitting per day. People who sit for more than 11 hours a day have a 40 percent increased risk of death in the next three years.
It’s worth it to your company to help your employees make fitness and movement a priority, not only to keep them around, but also to help them improve their ability to perform their work. A study of 200 workers discovered a 15% performance boost when an employee exercised for 30-60 minutes a day. 6 out of 10 workers said their time management skills, mental performance, and ability to meet deadlines improved on days when they exercised.
A HealthFitness survey heard from 92% of company HR leaders that their fitness centers helped their organization stay competitive in a difficult hiring environment. They also found that 40-45% of employees who are offered fitness facility access choose to participate largely due to convenience, an inviting environment, and low to no-cost membership.
Providing fitness options doesn’t necessarily mean building a giant gymnasium filled with the highest quality equipment and expert trainers in the middle of the office. But that certainly isn’t a bad idea if you have the funds and space. The Council on Foreign Relations offers an annual ping-pong tournament and stairwell scavenger hunts to help their employees get moving. An additional idea could be bringing in a yoga instructor (or finding one amongst your employee ranks) and pushing a few desks aside to offer yoga classes to employees. Another thought is providing a steps competition or Fitbit race where employees use an app on their phone or wearable devices to track their movements and compete against each other for the most steps within the competition timeline. An even simpler option is to provide a stipend to cover the monthly costs to employees that would like to utilize their own choice of fitness facility.
Offering healthcare benefits is a requirement in business today in order to have the ability to hire and retain quality employees. There are many options and angles to consider when deciding what kinds of plans or services to offer to your workforce. Over the past several years, with traditional insurance costs skyrocketing, there have been some new developments in healthcare models. Here are a few traditional and modern options to consider.
When it comes to traditional healthcare options, the three most common are Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Fee-For-Service (FFS) insurance.
The most popular of the three traditional healthcare models are HMOs. HMOs offer a relatively lower cost and broad coverage. Some, however, believe that the lower costs come at the expense of patient care. In an HMO, the employer chooses a network of providers and the employee must choose a Primary Care Provider (PCP) from within that network. Typically, this means that a new employee will need to change doctors. Employees are required to go to their PCP for everything in order to be covered, with the only exception being life-threatening situations. The PCP will then either treat the patient or refer them to an in-network specialist. Utilizing the predefined network allows for relatively low copayments for employees. However, PCPs are typically so overwhelmed with patients they can’t accept new patients, and the wait times can be extremely long. HMOs are typically preferred by hands-off patients that don’t like paperwork or record keeping, they typically just pay the copay on site and the rest is worked out between the provider and insurance company.
Next in line of popular traditional healthcare options is PPO, which provides a middle ground between HMOs and FFS insurance. With the PPO, the insurance company chooses a certain network of preferred providers. However, unlike with the HMO, employees aren’t required to see those providers in order to be covered, and they also do not need to get a referral to see a specialist. If a patient sees someone in network, they pay a relatively small copay, or if they choose to see someone outside of the network, they pay a significantly higher predetermined coinsurance amount. Deductibles are lower for in-network vs. out of network providers. PPOs are typically best for people that would like a little bit more freedom with their provider selection and also for patients that know they will exceed the deductible amount because everything before that is out of pocket.
Traditional FFS insurance is one of the oldest types. With this insurance option, employees can choose whichever providers they’d like. The insurance company requires the patient to fulfill a yearly deductible, and thereafter the insurance will cover a predetermined coinsurance rate which is typically 70/30% or 80/20%, with the insurance provider covering the higher percentage. In order to receive the insurance assistance, the patient will need to file claims forms and get reimbursed after the fact. One potential problem with FFS is doctors over-ordering services because they are paid individually for each service performed (test, treatment, etc.). This has led to a movement toward fee-for-value, or quality of service instead of quantity. Typically FFS plans are preferred by employees that have serious medical conditions and need to stay with their own medical providers. Highly paid employees that can afford the high premiums may also enjoy the freedom to see whomever they’d like in the expensive FFS model.
Because of the high cost and convolution of traditional healthcare, the entire system tends to be highly reactive. A patient has an issue, they usually wait to see if it will go away, then they go in to be seen for the issue and attempt to have it treated as efficiently as possible. That delay can cause the issue to become worse and often times leads to the patient going into a high-cost urgent care facility once the issue becomes intolerable. An onsite clinic’s focus from the beginning is on employee overall health and wellbeing; they lead with a proactive and preventative approach.
With traditional practices, it can be difficult for HR personnel to assist employees in fully understanding their options as there is usually a lot of fine print and everyone’s needs are unique. The onsite care model removes a lot of the complexities of traditional models that are primarily driven by insurance companies’ policies and practices. To take advantage of the highest levels of care and cost-savings the onsite clinic has to offer, employees will be limited to the personnel selected to work within the clinic. However, if done correctly, the clinic should be staffed specifically to the needs of the workforce so everyone should be able to find what they need within it.
According to the NAWHC, in over 60% of onsite clinics, the services provided are free or offered at lower rates than standard network or community provider rate. Even with this being the case for employees, onsite clinics also end up saving cost for the employer both in productivity and less overspending on unnecessary medical treatments, or treatments in high-cost facilities.
When a company is mindful and considerate about the healthcare options they offer, everyone should benefit, especially the employees.
Because employer-sponsored healthcare covers all or part of the cost of healthcare, each employee saves massive amounts of money as compared to purchasing their own insurance or risking going without it at all.
Most employer-sponsored healthcare includes a component of free or low-cost preventative services. A proactive employer can even offer free health risk screenings or onsite medical options which can help employees be more aware of and proactive about their own health.
Employees that are able to maintain their health both mentally and physically tend to get better sleep so are less fatigued throughout the day and also tend to have lower levels of stress overall. Each of these factors contributes to an increase in their ability to be more productive at work and beyond, which could ultimately lead to a raise or promotion.
