Corporate Wellness Programming

Abstract

Corporate wellness programming is on the rise for many American employers. Lifestyle choices such as smoking, sedentary behavior, poor nutrition, obesity, and stress account for more than have of premature deaths reported on yearly basis. Moreover, chronic diseases are prevalent amongst one third of working-age Americans, accumulating to over 75% of the nation’s annual health care cost. The constant increase in health cost has had a huge impact on employers. According to Udall-Bono Healthy Workforce Bill Offers Biz Important Tax Breaks (2007), in 2006, total annual health care spending is an estimated $2.2 trillion while the average employer medical costs increased 72 percent between 2002 and 2006. By 2014 our country’s total health care expenditures are estimated to reach $3.6 trillion. In turn, corporate wellness programs are being implemented to help create a healthier workforce and decrease employer health care cost through wellness promotion and disease prevention. This paper will discuss the background, regulation, and future direction of corporate wellness programming.

Executive Summary

The leading cause of deaths amongst American's in the early twentieth century was due to infectious diseases. However, since the early 1990's that health concern has change to an even bigger one, unhealthy lifestyles. Diseases such as heart disease, chronic obstructive pulmonary disease, type II diabetes, cancer, and obesity are the largest contributors to death amongst Americans in today’s society. In addition, healthcare related costs have been on the rise for employers, leading to trillions of dollars spent annually. For example, in 2001, cardiovascular disease resulted in more than $129 billion in lost productivity in the United States; according to the U.S. Surgeon General, 75 percent of all illnesses can be attributed to lifestyle-related causes (Lucuski, 2007). In the past, employers focused on resources that would aid the treatment of employees that where sick or disabled, however due to reduced margins, global outsourcing, and the study increase of health cost this method is no longer

efficient. Consequently, research shows most morbidity and mortality in relation to chronic illnesses can be prevented; the key to reducing employer health care cost is prevention. Hence, keeping healthy employees healthy through wellness programming will be the new method towards saving dollars associated with employee illness.

Individual behavior and lifestyle choices such as poor diet, sedentary lifestyle, and tobacco use have presented the largest impact on the development of chronic conditions. Moreover, a high calorie diet combined with low physical activity commonly leads to excessive body weight which in turn causes obesity. Obesity is the main contributor of type II diabetes, congestive heart failure, stoke, and hypertension. Tobacco use, also contributes to these same diseases as well as cancer. Furthermore, many companies have begun developing wellness programs as a way of conquering the loss of dollars in employee illnesses and absenteeism. As stated in ROI-based Analysis of Employee Wellness Programs (2007 2). "In reality, companies that have effectively developed a wellness culture also realize cost savings in reference to retention, recruitment, reputation and employee “presenteeism” (engagement)" Today, it has been reported the percentage of American business with 50 plus employees that have implemented some form of a corporate wellness program is 81%. Programs focusing on physical activity, weight, stress management, and smoking cessation have been proven to be very cost effective. According to Executive Summary: Health Promotion and Wellness (2007 8), "A poll of 84 U.S. employers conducted by the National Business Group on Health, for example, found that over half of respondents reported that employee morale had increased as a result of company fitness programs, and 27% said that company healthcare costs had decreased" Unfortunately, employee participation has been low, according to a study by the American association of Occupational Health Nurses, only 2% of employees have reported participation in company wellness programs.

Background

Corporate wellness programs date as far back as the 1920s, Japanese workers started their day with a round of calisthenics (Mochari, I, 2007). With employer health care cost on a constant rise the main goal of wellness programming is to decrease the incidence of employee hospitalizations, doctor visits, and prescriptions in relationship to poor lifestyle choices. Many wellness programs have been designed to address diabetes, heart disease, stoke and other preventable illnesses. Company wellness programs are implemented in a variety of ways ranging from onsite exercise facilities staffed by exercise specialist/personal coaches, onsite nurses nutritionist, and programs that encourage employees to eat right, exercise, and become tobacco free. According to Udall-Bono Healthy Workforce Bill Offers Biz Important Tax Breaks (2007), workplace wellness programs have been economical, averaging $30-$200 per employee. Studies have reported a proven rate of return on investment within 12 to 18 months, ranging from $2 to $10 for each dollar invested.

Regulation of Corporate Wellness Programs

The biggest regulatory concern involved in corporate wellness programming is confidentiality. Final regulations on the Health Insurance Portability and Accountability Act (HIPAA)'s nondiscrimination provisions, issued by the departments of Labor, Treasury, and Health and Human Services, apply to plan years beginning on or after July 1, 2007. HIPAA prohibits group health plans from discriminating against individuals because of their health factors. However, the rules include an exception that allows plans to take health factors into account in the context of a HIPAA-qualified wellness program. "Health factor" is defined broadly to include physical or mental condition, claims experience, medical history, health care previously received, and genetic information.( Bruno and McGeoch, 2007). Wellness programs must also meet standards of the American’s with Disabilities Act. Lastly, employees health status should not be keep private and should not be shared with his/her employer; hence, and employees health status should not effect his/her