Most employers have established employee wellness programs in their continuing efforts to rein in health care costs, and many of those programs use incentives. Similarly, the majority of companies now use some kind of auto-enrollment feature or other technological facilitator for benefits administration.
However, according to research conducted by EBN parent company SourceMedia and bswift, the majority of employers overlook crucial methods and practices that could significantly increase engagement and lower the bottom line. Companies are not giving outcomes-based incentives a sufficient chance on wellness, and a full third don't offer online benefit enrollment, one of the most useful and commonly available technological solutions. (For a different view on outcomes-based incentives, read the related story "Over-promise, under-deliver?," on page 14.)
"High levels of participation are critical for wellness program success, but companies are falling short when it comes to outcomes-based incentives that reward participants for their actions and increase engagement," says Brad Wolfsen, executive director at bswift, a benefits software and solutions provider. "To [drastically impact] wellness, assessments must be objective, progress must be measurable, and employees must be invested in their own wellness success."
The study reports that while 85% of large companies and 81% of smaller companies have wellness programs, only 44% of wellness plans have employee participation rates above 50%. Seventy-eight percent of large companies and 69% of smaller ones use incentives to spur participation (up from 76% and 52%, respectively in 2012), but those incentives apparently aren't getting through.
Sixty-four percent of large employers - up from 59% in 2012 - use health insurance premiums penalties (or rewards) to motivate employees. A majority (54%) now spend more than $250 annually per employee on wellness, compared to 49% last year.
"Wellness programs are becoming more tailored to an individual company's health needs, as opposed to a one-size-fits-all solution," Wolfsen says. "And I think more of a focus is being placed on embedding the wellness program in the culture and social network of an organization. There's been a big push in recent years on running a socially based, interactive program to drive wellness engagement and results - whether that's team competitions or individuals challenging each other."
Incentives should be shifted in a more results-based direction, bswift says; only 15% of large employers offer incentives or disincentives for meeting or exceeding biometric thresholds, for example, despite the fact that 77% have biometric testing in place (up from 61% last year). Additionally, bswift says, not enough employers are leveraging defined contribution strategies to increase consumer engagement or up-to-date benefits automation to lower administrative costs.
"What it boils down to is that employers are being too simplistic when it comes to wellness offerings and making things too difficult when it comes to benefits administration," says bswift CEO Rich Gallun. "As employers peruse cost-containment strategies such as wellness, defined contribution and consumerism, automation and technology can amplify the impact by more efficiently and effectively communicating with employees and freeing up the time of HR professionals to focus on these strategic initiatives."
The research reports that 31% of large employers do not offer online benefits enrollment for new hires, and the same percentage still manually adjust coverage amounts when the participant turns 65 or 70. Sixty-three percent manually verify dependent eligibility for life events.
Bswift says these numbers suggest a significant chance for cost savings on administration, particularly given the option of relatively inexpensive technology to automate the processes.
Investment in automation typically earns a 3-to-1 or 4-to-1 return on investment, Wolfsen says. Getting away from paper-based processes not only can improve ease of enrollment, it can significantly reduce office costs.
Additionally, only 14% are planning on moving active employees to defined contribution models in 2014.
"Very few employers to date have moved to a defined contribution structure for their benefits," Wolfsen says. "Most employers have adopted a wait-and-see approach to find out what's happening with the various programs going on, across various exchange platforms, to see what defined contribution accomplishes. You know, I think we're still in the very early days of employers moving to that solution."
The survey was conducted with hundreds of benefit decision-makers at organizations with at least 50 employees that also offer benefits. Those with 50 to 500 employees were considered small employers, and large employers were any beyond that.
"Wellness and defined contribution are two sides of the same coin," Wolfsen says. "What I've always advocated for in wellness is transparency around the cost of unhealthy behaviors and explaining to employees how those unhealthy behaviors translate into more expensive health care costs for you and for the company, and as a result higher premiums and out-of-pocket expenses for the individual. What defined contribution does is make much clearer the employer's contribution to your benefit."
