how to start a health contingent wellness program, What does health contingent mean?

To be effective, when you start health contingent wellness programs, you should do two things well. First, the program should help improve the health of all employees, especially those with elevated health risks. Second, the program should help the healthy employees stay healthy.

When these two things happen, there will be a reduction in the cost of employee health care and improvements in both productivity and morale (see a study discussing these improvements here). But all of this is easier said than done.

Even though there are clear benefits to having a healthy lifestyle for both individuals and companies, there is a need to tread lightly on anything that involves an employee’s personal life. Problems arise when organizations dictate what individuals can and cannot do away from work.

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Workplace wellness programs that provide opportunities for growth and improvement in the quality of life — while respecting personal space — are more likely to demonstrate positive outcomes. Every workplace is composed of individuals with different behaviors, habits, cultural influences, and health characteristics.

Some employees are extremely healthy, while others live with a variety of elevated health risks or may even have a chronic disease. And none of this is static. People change. People with good health can develop health risks and the opposite is also true.

Efforts to provide wellness programming for all the employees within an organization is a challenge. Throw in an incentive program that requires complicated risk tracking, behavior change interventions, and various degrees of rewards, and things can get complicated very quickly.

With a limited budget, most wellness programs struggle to strike a balance between helping the healthy stay healthy and helping employees with elevated health risks improve their health. More often than not, programs focus on just one subset of the workforce population while the rest of the employees get neglected.

Here is a short video that shows how a well-organized health contingent wellness program can adequately fulfill its duty to both the healthy employees and those with elevated health risks.

Most employers treat their employees with respect. Most employers recognize that the individuals who work and serve in their organizations are the single most valuable asset that the organization has. Wellness programs that are based on sound scientific evidence can change lives.  When individuals adopt and maintain healthy behaviors, not only will they extend the length of their lives, but they will also improve the quality of their lives.

When done correctly, a wellness program is an outward demonstration that an employer truly does care about every employee and his or her health. Despite all good intentions and careful efforts to lift and support employees, some employees will view a wellness program as punitive. And some will complain.

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It is true that personal health and personal life are not the business of an employer. Nobody wants big brother telling them what they can or cannot do on their own time or with their own health. And no one wants their private health data shared with anyone except a medical professional or family member.

These are real concerns that employees have regarding wellness program participation. And these concerns are the reason why programs need to be organized and administered in a way that does good and does no harm.

No More Sharing Risk

The cost of health care is calculated differently than the cost of life insurance, house insurance, or car insurance. Unsafe driving leads to higher car insurance.

If an employee is big into BASE jumping, their life insurance will be higher because the premiums are based on risk of premature death. Having a fireplace or flooding potential or asbestos siding are all risks that will increase the cost of homeowners insurance.

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The cost of insurance is calculated on the amount of risk the insurance company is taking. But for decades, the cost of health care has been unrelated to individual health risks.

However, now your health insurance is beginning to take the same risk-based approach to pricing as other forms of insurance. But there is one important twist; risk assessment with health insurance is usually voluntary and not forced upon you by the insurance company. A health-contingent (outcomes-based) wellness program is a step in that direction.

Incentives can be offered to those who have lower risks or who are working to improve their health. Those who maintain their health, and who are therefore less risky to insure, get a better deal on health insurance through lower deductibles, lower premiums, and lower co-pays.

A health-contingent program is one where an employee must meet a health standard to qualify for a reward. A reward can be either an incentive OR a penalty.  WellSteps strongly discourages the use of penalties. People respond better to positive rewards so that is what we promote.

Think about it this way. As a teenager, do you remember how much you disliked being told what to do? It turns out that teenagers — and most adults — don’t like being told what to do! We dislike having privileges taken away even more.

The punitive approach to employee wellness is not the happy option. We strongly recommend an approach that allows employee to earn a positive reward if they choose to. And yet, companies, in spite of their best intentions, often mess things up in their attempts to provide an employee wellness program. Let’s count the ways.

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How To Avoid Getting Sued

Despite the guidelines that were included in the Affordable Care Act, a few lawsuits have been filed against wellness programs. These cases have taught us a few simple rules that should be followed when setting up an effective wellness program. If you start a health contingent wellness program, the first rule is to treat people nicely!  If you are nice, you really won’t need to worry about these other rules. But here they are just in case:

  1. Provide employees the opportunity to qualify for the reward once per year.
  2. Have and communicate alternate ways to qualify. WellSteps has developed a clever way to manage the alternate requirement on an individual basis. We do this in a way that prevents the employee’s colleagues from ever knowing.
  3. Give every employee a chance to earn the reward.
  4. Do not deny or limit insurance coverage for non-participants.
  5. Provide notice if collecting anonymous medical information.
  6. Follow data security rules.
  7. Limit the reward value to 30% (or less) of the cost for employee-only health insurance coverage.
  8. Reasonably design your program to promote health or prevent disease. Reasonable design means the program cannot take too much time, require intrusive procedures, or place significant costs on employees. Promoting health or preventing disease means using an evidence-based program.

Start Health Contingent Wellness Programs Wrong and You Can Destroy Employee Morale

There are some companies and institutions that have used poorly designed health-contingent programs and all they accomplished with their wellness program was to reduce employee morale. Here is what they did wrong:

  1. Ramrodded the program down employees’ throats without listening to their input
  2. Failed to communicate about the employee wellness program until it was rolled out
  3. Used a stick-based approach instead of carrot-based approach
  4. Implemented a health contingent program but did not provide tools or skills to help employees improve health. This is sort of like asking employees to write a business report with no desk, chair, or computer.

If a workplace already has a confrontational culture and a leadership style that does not support  employee wellness initiatives, it is probably not a good place to implement a health-contingent wellness program. The culture needs to be prepared with some organizational development first. 

A health-contingent wellness program will thrive at a workplace that values, supports, and cares for its employees. It will thrive in work locations where employees trust management and vice versa. It will thrive in locations where healthy living has been integrated into the work culture. But without management and leadership support, the wellness program is likely to fail.

Health-Contingent Wellness is Really Just Prevention

WellSteps has created a platform that allows organizations to develop, administer, and evaluate an effective health-contingent wellness program. Insurance carriers and larger companies have spent a lot of time and money trying to help employees manage chronic diseases. The entire disease management industry is designed to improve the health of those with a chronic disease. In essence, a health-contingent wellness program is just prevention.

The ideal time to help people with disease management is before they get the disease. The time to help individuals improve their health and reduce their healthcare costs is when they start to demonstrate elevated health risks. Elevated health risks are the precursors to chronic disease. Prevention efforts require that wellness coordinators help individuals improve elevated health risks.

At WellSteps, we call this WellSteps PLUS. It’s a flexible software platform that uses employee biometric data to organize, track, plan, and evaluate the health improvement and incentive status of every single employee. It provides structure and organization to the otherwise complex task of monitoring and improving the health of individual employees. It gives organizations a powerful way to manage employee health in a private, unobtrusive, and positive way.

health-contingent wellness, how to start a wellness program, outcomes based wellness

So What?

When you create a wellness program make sure you have employee input, communicate the program well, offer rewards instead of penalties, and provide the tools necessary for employees to improve their health. Make sure that the organizational culture is ready for a wellness program.

A well organized, health-contingent wellness program can allow employers to maximize the impact of their wellness strategy. Do it right and both the employee and the employer can win.

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About The Author

Dr. Steve Aldana

Dr. Aldana is the CEO of Wellsteps, a worksite wellness solution that leads the nation in wellness program deployment and engagement. Dr. Aldana authored over 75 scientific papers and 7 books on health risk management, healthy living, and health promotion programs. He has given over 350 keynote speeches across the U.S. on the ability of good nutrition and regular exercise to prevent, arrest, and reverse many chronic diseases.