Emerging Engagement Strategies for Employee Wellness

February 2011

Agenda

• Trends: Highlights from Buck’s fourth annual survey WORKING WELL: A Global Survey of Health Promotion

and Workplace Wellness Strategies

• Compliance: Legal requirements that impact wellness programs and key actions taken in 2010

• Incentives: Effective incentives that focus on engaging members in their health and in their health care purchasing decisions

• Communication: Emerging employer practices that focus on changing member behavior

Questions are welcome throughout

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Working Well: A Global Survey of Health Promotion and Workplace Wellness Strategies

By: Sherri Bockhorst

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2010 Fourth Annual Global Wellness Survey

Objective:

• Assess trends in employer-sponsored wellness strategies and practices

Participants:

• 1,248 participating employers (620 U.S.)

• 47 countries (62% North America)

• 13 million employees

• All industry categories

Reports:

• Global survey report

• Executive summary in 8 languages

• Special country reports

www.BuckSurveys.com

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60%

44 %

41 %

34 %

29 %

25 %

44%

28%

23%

16%

22%

Globalization of Strategy

STRATEGY IS GLOBAL

(MULTINATIONAL EMPLOYERS)

Yes54%

No46%

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Reasons For Not Having a Global Wellness Strategy

Differing cultures, laws, and practicesacross regions

16%

No global oversight for health care strategy

Lack of vendors who can meet our global objectives

Limited availability of language and culturally adapted tools and solutions

Not a priority in our organization

Other

Prevalence of Incentive Rewards (or Penalties)

U.S.

Asia

Canada

Africa/Mid East

Australia

Europe

Latin America

62 %

42 %

41 %

34 %

29 %

25 %

16%

25%

19%

30%

24 %

24 %

11 %

38%

13%

39%

28%

41%

47%

63%

46%

0% 20% 40% 60% 80% 100 %

Incentive rewards offered today

Not offered today, but have plans to offer

No plans to offer

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Employer Objectives Driving Wellness Strategy

Africa/Mid East Asia Australia Canada Europe

Latin America

Productivity/presenteeism 2 5 4 1 1 1

Morale/engagement 1 2 2 3 2 2

Absence 5 6 3 2 4 7

Workplace safety 2 4 1 6 6 3

Work ability 4 1 5 4 5 4

Org. values/mission 5 3 8 7 3 5

Attract and retain 8 8 7 8 7 8

Promote image/brand 7 7 6 9 10 10

Health care costs 11 11 10 5 11 11

Social responsibility 9 9 9 10 9 6

Comply with legislation 9 10 11 11 8 9

Supplement gov't care 12 12 12 12 12 12

U.S.

2

4

3

6

7

5

8

9

1

10

11

12

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Health Issues Driving Wellness Strategy

Africa/Mid East Asia Australia Canada Europe

Latin America

Stress 1 1 1 1 1 2

Physical activity/exercise 4 3 3 3 2 1

Nutrition/healthy eating 4 7 1 5 5 3

Work/life issues 4 2 3 2 3 12

High blood pressure 4 10 10 8 10 4

Chronic disease 2 9 9 7 13 5

Workplace safety 9 4 6 6 4 6

Depression/anxiety 8 13 7 4 7 9

High cholesterol 12 11 11 9 12 7

Tobacco use/smoking 11 5 13 11 8 10

Psychosocial work envir. 10 8 14 12 6 8

Obesity 15 14 8 14 14 11

Sleep/fatigue 16 12 5 9 11 14

Personal safety 13 6 12 13 9 13

Infectious diseases (HIV) 3 17 16 17 18 16

Maternity/newborn health 18 15 18 16 16 15

Substance abuse 14 18 15 15 15 18

Public sanitation 17 16 17 18 17 17

U.S.

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1

2

10

5

3

11

9

7

8

15

4

14

13

17

12

16

18

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Impact of Wellness Programs on Health Care Trend

REDUCTION IN HEALTH CARE TREND RATE – U.S. EMPLOYERS

AVERAGE ANNUAL REDUCTION IN HEALTH CARE TREND RATE – U.S. EMPLOYERS

Yes

18%

No

22%

Don't know

60%

More than 10 trend percentage points per year

6-10 trend percentage points per year

2-5 trend percentage points per year

1 or fewer trend percentage points per year

2 %

10 %

61%

28 %

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Activities For Which Incentive Rewards Are Offered

Completing a health risk appraisal

Participation in workplace health "challenges"

Completing a biometric health screening

Obtaining regular preventive care examinations

Refraining from tobacco use

Tracking regular healthy living activities

Completing educational courses (live or online)

Contacting a health coach or advisor

Adherence to a disease management program

Achieving or maintaining health status results

Adherence to a therapeutic regimen

57%

50%

46%

37%

37%

33%

29%

30%

25%

23%

13%

14%

19%

18%

26%

27%

30%

34%

39%

37%

33%

51%

18%

16%

21%

15%

18%

18%

15%

14%

15%

17%

14%

10%

15%

15%

21%

18%

19%

21%

16%

23%

26%

22%

Offered todayPlan to offer in next yearPlan to offer in next 2-3 yearsDon't currently offer and no plans to offer

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INCENTIVES/REWARDS

Gifts/merchandise

Free or low-cost preventive health services

Raffles/drawings

Employer-subsidized gym membership

Cash

Reimbursement for wellness classes (nutrition, smoking)

Health insurance premium reductions

Vacation days/paid time off

Reduced health copayments

DETERRENTS/PENALTIES

Health insurance premium increases

Increased health copayments

Condition of employment (e.g., not hiring smokers)

Benefit reduction

Salary penalty

Contribution to health savings and/or spending accounts

Mandatory participation (such as health risk appraisal) in order to receive health insurance

49%

49%

47%

37%

35%

32%

29%

15%

12%

8%

11%

8%

10%

6%

7%

8%

13%

7%

5%

7%

10%

9%

8%

11%

6%

15%

17%

14%

10%

18%

30%

34%

35%

46%

52%

45%

40%

63%

73%

68%

15% 8% 11% 66%

84%

83%

91%

87%

96%

4%

3%

4%

5%

4%

2%

1%

7%

9%

7%

4%

2%

Types of Incentive Rewards Offered

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Offered todayPlan to offer in next yearPlan to offer in next 2-3 yearsDon't currently offer and no plans to offer

3%

2%

1%

Compliance

By: Dannae Delano & Alan Kandel

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HIPAA Nondiscrimination

• Do HIPAA nondiscrimination rules apply?

– Yes, if a wellness program is part of a health plan

– If yes, discrimination in eligibility or benefits based on health status is prohibited

– Violation results in excise tax liability ($100 per day per affected individual)

• Two types of wellness programs:

– Participation only

• Participation must be available to all similarly situated individuals

– Standard based

• If award is based on a standard, five conditions must be met

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HIPAA Nondiscrimination – Standard Based

1. Limited value for award

2. Promote health or prevent disease

3. Annual qualification

4. Available to all similarly situated participants

5. Disclosure of reasonable alternative or waiver

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GINA Compliance

• Both Title I and Title II compliance required

– Title I applies to group health plans and insurers

– Title II applies to employers and non-group health plan wellness programs (not discussed)

• Title I compliance: Three general prohibitions

1. Adjusting group premium or contribution amounts based on geneticinformation

2. Requesting or requiring a genetic test

3. Collecting genetic information before or in connection with enrollment, or at any time for underwriting purposes

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GINA Compliance

• Alternatives for health assessment compliance

1. No incentive for completion of health assessment

2. Incentive on health assessment with optional completion of genetic information

3. Incentive on completing health assessment with no genetic information requested

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ADA Compliance

• Prohibits discrimination in employment against qualified individuals with disabilities

• Are mandatory physical examinations or medical inquiries considered discriminatory?

– Permitted as part of an employee health plan if:

• Participation is voluntary

• Information obtained is maintained as confidential medical records

• Information obtained is not used to discriminate against employee

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ADA Compliance

• What is voluntary participation?

– ADA and EEOC regulations do not provide guidance

– Informal EEOC guidance takes a strict interpretation

• Health assessment is voluntary if employees are neither required to participate nor penalized for nonparticipation

• Certain practices are considered involuntary

– Voluntary addressed under GINA Title II regulations

CAUTION: Compliance with HIPAA wellness program rules does not equal compliance with ADA

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Impact of Health Care Reform

• Codified HIPAA health status nondiscrimination rules

– Increase maximum permissible award from 20% to 30% and HHS, Treasury and DOL may increase up to 50%

– Effective for plan years beginning on or after January 1, 2014

• HHS, Treasury and DOL required to prepare congressional report on wellness programs

• Grants for small businesses available to promote wellness programs

• CDC assistance with wellness programs

• Grants for state and local governments and community-based organizations for wellness programs

• Preserving grandfather status

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Other Compliance Issues

• State laws

– Insured plans may have to comply with state insurance law limits or restrictions on wellness programs

– Non-group health plan wellness programs may need to comply with state laws prohibiting discrimination in the workplace

• Tax implications

– Cash or cash equivalent awards are taxable

– Health benefit related awards are not taxable• May raise discrimination or comparability issues

– Other non-cash awards • Taxable, unless nontaxable fringe benefit

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Other Compliance Issues

• Cafeteria plan election change issues

• Nondiscrimination testing issues

– FSAs and HRAs

– HSAs

• HIPAA privacy and security

• COBRA compliance

• ERISA compliance

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Other Compliance Issues

• ADEA, Title VII and FLSA compliance

– ADEA: No discrimination against any employee over age 40

– Title VII: No discrimination against protected classes of employees

– FLSA: Time to complete mandatory programs could be compensable

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Effective Wellness Incentives

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Resources, services and tools that enable employees to take action

Motivators that encourage greater responsibility for personal health and lifestyle choices

Elements that educate and promote your wellness program, and build awareness of personal health status

Information“I understand”

Incentives“I want to”

Infrastructure“I’m able to”

Mandates that enforce accountability for specific behaviors and actions

Imperatives

“I must”

Building Your Way to a Culture of Health

• Coaching resources• Health portal• Onsite support• Transparency tools

• Prizes• Premium differentials• Account-based design• Social/behavioral techniques

• Communication• Branding• Data

• Tobacco-free policy• Required health screening• Mandatory training

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• Collect and analyze detailed individual health and risk information for covered members

• Create dashboard to benchmark over time and against goals

WHY?

• Employers who use data to drive decisions are shown to reduce health care trend by as much as 50%

• Data should drive investment in programs, incentives and leadership involvement

• Employees need line of sight to company investments in wellness

WILL IT FLOAT?

• HIPAA Privacy

• GINA

Tactic #1 Information

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Tactic #2

• Extend programs and incentives to spouses and dependents, where applicable

WHY?

• On average, spouses are 20% more costly than employees

– Adverse risk of dependent coverage caused by cost-share strategies may create excise tax challenges in future years

• Behavior is social1

– If your spouse is obese, you are 57% more likely to be obese

– If your friend is a healthy eater, you are five times more likely to eat healthy

WILL IT FLOAT?

Incentives

1. Source: Gallop

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Tactic #3

• Mandate participation in the health assessment, including biometrics, for eligibility in the medical plan, or even as a term of employment

WHY?

• Allows for individualized targeted intervention

• Incentives should be focused on more meaningful interactions

• Pivotal in measuring improvement in individual and population health status

WILL IT FLOAT?

• GINA

• ADA

• HIPAA Nondiscrimination

Incentives

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Tactic #4

• Require a specific biometric outcome during annual screening, or active participation in programs that address an area of concern, in order to earn incentives

WHY?

• People who are obese spend about 41 percent more than an average-weight person1

• Prevalence of chronic condition by BMI categories2

WILL IT FLOAT?

• HIPAA Nondiscrimination • GINA

• ADA • State insurance laws

• HRA/HSA contributions • Qualified plan Issues

Incentives

1. Source: Dr. Thomas R. Frieden, director of the U.S. Centers for Disease Control and Prevention, July 2, 2010

2. Source: Gallup/Healthways 2009

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Tactic #5

• Reduction in maintenance medication costs for individuals compliant with required regimen for disease management program

WHY?

• High noncompliance with recommended care by disease state1

– Diabetes: 55%

– High cholesterol: 51%

– Overweight or obese: 73%

• Medication adherence saves approximately $7,800 annually per patient

WILL IT FLOAT?

• IRC 105(h) Nondiscrimination

• ADA

• HIPAA Nondiscrimination

Incentives

1. Source: Elizabeth McGlynn, et al, The Quality of Health Care Delivered to Adults in the United States,NEJM, Vol. 348:2635-2645 June 26, 2003 (No. 26); NHANES 2005-06

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Tactic #6

• Fixed payment schedule for highly utilized, readily available services

WHY?

• Wide variation in cost exists today by geography for routine services1

– Colonoscopy costs range from $233 to $734

– Average cost is $560

– Moving to the average would save 29% of all colonoscopy costs

• Improved ability to provide transparency of cost and quality data

WILL IT FLOAT?

Incentives

1. Castlight Health

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Tactic #7

• Medical home requirement

• Patient-Centered Medical Home (PCMH) – Continuous access to a personal physician who provides comprehensive and coordinated care for the majority of the patient’s health care needs

WHY?

• Improved outcomes and lower cost

– CHF patients had 35% fewer hospital days1

– An increase of just one primary care physician is associated with 1.44 fewer deaths per 10,000 persons2

• Prepare employees for the potential future of health care delivery with Accountable Care Organizations (ACOs)

WILL IT FLOAT?

Incentives

1. RAND and the University of California at Berkeley

2. Johns Hopkins University

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Tactic #8

• Require measurable involvement and support of leaders in wellness program – tie to performance bonus or terms of employment

WHY?

• Currently, fewer than 10% of leaders are true champions of wellness1 who:– Go to bat for better wellness programs

– Understand the human and financial benefits of health promotion

– Educate other managers and employees about them

– Adopt healthier lifestyles for themselves and encourage others by recognizing and celebrating others’ efforts

WILL IT FLOAT?

• ADA

Imperatives

1. Wellness Councils of America

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Communications

By: Judy Gruender

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So How Can We Get Employees to Pay Attention?

• The two most important initiatives to ensure success with your wellness program are:

1. Communicate, communicate, communicate

• Creative, targeted communications across multiple media will educate and build awareness

• Helps members understand that it’s not just about saving money; it’s about promoting health

2. Incentivize, incentivize, incentivize

• You can enjoy a better life and be rewarded financially

• Incentives help secure members’ attention

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Communication Objectives

• Change-focused

– Driven by outcomes

– With one purpose – to change behavior

• Consistent– Managed through one source

– Resulting in one voice – expressed through effective writing

• Coordinated– Implemented through a strategy that optimizes online capabilities

and other media

– Provides members with one-stop shopping experience

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The Spectrum of Employment Relationships

Like an independent contractor; simply minimizes cost and maximizes personal outcomes

Engaged consumer; seeks information, weighs alternatives, considers cost and outcomes

Passive, “entitled”; waits for employer to make decisions; little concern about costs or impact

Member Role

Limited obligation or involvement in the individual’s choices

Partner, enabling members to make informed decisions for their well-being

Architect/custodianproviding, at a minimum, adequate benefits & fair policies

Employer Role

Essence of “Contract”

“We’ll take care of it for you”

“We support each other and share responsibility”

“You’re on your own”

Paternalism Consumerism Individualism

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Engaging Employees Through Technology (4 I’s)

• Information

– Personalize (make it real to me)

– Integrate (one place, easy to access, easy to understand)

• Incentives

– Meaningful (enough to get my attention and move me to act)

• Infrastructure

– Enabling (design,resources, and tools to help me make better decisions and take action)

• Imperatives

– Take responsibility for my financial health

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Safeway AisleONE Benefits Portal

The Solution

• A benefits portal for employees and covered spouses/partners

• One-stop shopping experience available through one URL with one password

• A “sticky” experience that engages employees

• Comprehensive site to support all aspects of a culture of health

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Safeway AisleONE Benefits Portal

• Dashboard tracks completion of tasks, biometric scores, attainment of incentives

• Web 2.0 features create compelling experience… includes configurable avatar that reflects BMI

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Safeway AisleONE Benefits Portal

• Personalized, action-oriented “to do” lists

• Resources for health improvement

• Behind-the-scenes data exchange with benefit plans, administrators and other resources

• Quick links and single-sign-on to these outside resources

Safeway Adoption:

•15% adoption in first two months

•50% of users came back for multiple visits

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Safeway Portal Results

• During the first six months …

– Online enrollment during the open enrollment timeframe increased to 85%(as compared to 50% the prior year)

– Call volume related to login problems dropped dramatically

– More than 90% of the eligible user population accessed the site (41,500+ unique visits), with “return visits” averaging 7 per user

• While open enrollment last fall drove some traffic, more than half of the visitors during this timeframe did so for reasons other than making an election, as they did not make any changes during the open enrollment period

• Feedback from members, including senior management has been positive

• Industry recognition has been positive, too…

– Portal honored with International Association of Business Communicators (IABC) Gold and Bronze Quill Awards, two Hermes Creative Platinum Awards and two Awards for Publication Excellence (APEX)

– Safeway program and technology is a featured topic at industry conferences

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It’s Becoming an App World: Current Trends

• Smartphone usage is here to stay.

– 100 million users in 2009 to nearly 1 billion users by 2013

• Social networking and mobile computing platforms are fundamentally changing the ways people communicate

• More than 300,000 apps on the market

Buck Benefits™: The First-of-its-Kind Benefit App

Members can:

• Track personal health information, such as health screenings, vaccinations, medications, allergies and more

• Receive personalized benefit info via data feeds

• Virtual insurance cards

• Spending and/or savings account balances, current benefit elections, plan comparisons and more

• Create a network to securely share info

• Access Live Well resources — including quizzes, healthy recipes, benefits dictionary and more

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Thank You!