Getting paid to get on that treadmill

Eve Tahmincioglu • Profile • E-mail

Given the economic downturn and accompanying layoffs over the past year, you might think company wellness programs would be going the way of the matching 401(k). Not so.

In fact, many companies that have tried to trim their workers’ waistlines — and health care costs — may find themselves in a better position than ever to give workers a little nudge.

“The rising cost of medical care is unsustainable and is a huge and legitimate concern to employers that pay for it,” says labor attorney Hanan Kolko. “During the past decade or so, health care costs have been rising at three times the rate of inflation. Every nickel that goes to pay for rising medical costs can't pay for raises, pensions or 401(k) matches.”

The median health care expense per employee last year was $7,173, according to a recent survey by Watson Wyatt and the National Business Group on Health.

But companies save from $1.49 to $4.91 in health-related expenses for every dollar spent on wellness programs, according to the U.S. Department of Health and Human Services.

That may be part of the reason why, despite the downturn, employers don’t seem to be skimping on their health and wellness initiatives.

A survey of about 500 human resources and benefit executives by professional services firm Towers Perrin found:

• 50 percent of companies have or will introduce or increase investments in wellness and health promotion in 2009 and 2010.
• 32 percent have or will introduce or increase financial incentives, such as bonuses or premium discounts, for wellness or health promotion activities in 2009 and 2010. Another 30 percent are considering this action.

• 45 percent say they are considering introducing or increasing penalties for nonparticipation in wellness or health promotion activities.

This is an opportune time for employers to focus on wellness, says Dave Guilmette, managing director of the Towers Perrin Health and Welfare practice. Employees, he says, are going to think: “If I want to keep my job, I better pay attention to what my employer is asking me to do.”

Treadmills in the office
Financial services firm USAA has been running a wellness program for five years.

“We think 50 to 80 percent of our medical costs are related to people who are overweight,” says Dr. Peter Wald, enterprise medical director for the firm, which has 20,000 employees.

While the San Antonio, Texas-based firm saw some improvements thanks to the wellness programs, the company had little success actually getting people to lose weight, Wald says.

Previously, workers received a lump sum of money just for participating, but now the company is tying incentives to actual weight loss. Employees have a year to lose 10 percent of their body weight. If they can pull it off, they’ll get $300.

At AstraZeneca US, saving money on medical costs and improving worker productivity are among the key reasons for a continued focus on promoting employee health.

Despite expected layoffs of 15,000 globally through 2013, the pharmaceutical firm has, for the most part, not allowed their wellness efforts to wane.

Due to economic issues, the company did end financial incentives for participation. However, AstraZeneca added a new program to encourage workers to ride their bikes to work every Friday. They also now offer a free two-week trial membership to the fitness center and encourage managers to lead by example by adopting healthy behaviors such as eating right and exercising.

“We know people are more pressured for time,” says Dr. Joe Henry, executive director of US Safety, Health and Environment for the Wilmington, Del.-based company. “If we are going to ask people to work harder and longer hours, we have to give them something.”

So AstraZeneca is making it easier for employees to exercise by scheduling morning meetings later — so workers can hit the gym — and also implementing ‘walk stations’ that allow employees to walk at a slow pace on a treadmill while working or in a meeting.

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