Employers Increasingly Using Wellness Programs to Cut Health Costs, Survey Finds

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By Genevieve Douglas

June 30 --Employers are increasingly turning to wellness programs to counteract rising health care costs, according to the 2015 Society for Human Resources Management Employee Benefits Survey, released June 29 at SHRM's 2015 Annual Conference & Exposition in Las Vegas.

Employers are learning that by targeting the most common chronic diseases--heart disease, diabetes and obesity--wellness program can have the greatest return on investment, Evren Esen, director of SHRM's survey programs, said June 29 at a press briefing at the conference.

The survey of 463 HR professionals found that the majority of employers are offering wellness benefits to manage chronic diseases and other health-related issue; offerings include wellness resources and information (80 percent) and wellness programs (70 percent). The survey also found that health and lifestyle coaching, smoking cessation programs and premium discounts for getting an annual risk assessment have increased in the past five years.

While wellness programs have quickly become one of the most effective ways to reduce health care costs for employers, Esen warned, the programs will not immediately decrease costs. “It takes time, and it takes a well-designed program,” she said. However, in addition to cost reduction, wellness programs can provide new avenues for employees to be better engaged with the organization and therefore less likely to leave for another employer, she added.

Benefits Trends

Five-year trends show a slow shift of health care costs to employees, the survey said. For example, it found that consumer-directed health plans such as health savings accounts have risen by 8 percentage points and employer contributions to HSAs have increased by 10 percentage points.

The survey further revealed five-year trend increases in the percentage of organizations offering mental health coverage, contraception coverage, vision insurance, short-term disability insurance, critical illness insurance and coverage for laser-based vision surgery.

The survey also found:

• the most common benefits offered are paid holidays (98 percent), dental insurance and prescription drug programs (both 96 percent), mental health coverage and professional memberships (both 91 percent), and organization-provided break room/kitchenette and traditional 401(k) or similar defined contribution retirement savings plan (both 90 percent);

• the shift to defined contribution retirement savings plans and Roth 401(k) savings plans continues, with only about a quarter (26 percent) of organizations reporting that they now offer defined benefit pension plans that are open to all employees;

• the most commonly offered women’s health benefit is contraceptive coverage (83 percent);

• three out of five (60 percent) employers offer some form of telecommuting, with 56 percent of respondents reporting that their organizations offers telecommuting on an ad-hoc basis, 36 percent part of the time, and 22 percent on a full-time basis; and

• the three family-friendly benefits that have decreased over the last five years are bringing children into work in an emergency (22 percent), child care referral services (9 percent) and on-site parenting seminars (1 percent).

 

Addressing Financial Health

Benefits that can help employees’ financial health are gaining popularity as well, according to the survey.

Employees in difficult financial situations experience decreased productivity job performance, Esen said. “It’s really in the best interest of employers to help employees with their financial decisions about investments,” she said.

To that end, employers are increasingly offering resources to help employees plan for retirement, to help first-time home buyers and to educate workers on pension benefits.

In the past year, Esen added, 24 percent of employers, compared to 2014’s 17 percent, offered financial advising benefits to employees.

Tailoring Health Benefits to Employee Needs

Employers should consider their employee demographics when deciding benefits offerings, Esen recommended.

For example, she said, egg freezing is a high-cost benefit that is only offered at 2 percent of organizations. Those companies that offer it, however, are almost entirely in the technology industry, including Apple, Facebook and Google, Esen said. They have found that the cost of providing the benefit is worth it in order to retain their top female talent, she added.

Other emerging benefits reported by survey participants include medical travel for health care, company-sponsored fitness competitions and challenges in the workplace, wearable fitness technologies, and car charging stations.

To contact the reporter on this story: Genevieve Douglas in Washington at gdouglas@bna.com

To contact the editor responsible for this story: Simon Nadel at snadel@bna.com


The survey is available at http://www.shrm.org/research/surveyfindings/articles/pages/2015-Employee-Benefits.aspx.