Your Company’s Wellness Program — Beware
Michelle Obama, Jamie Oliver, Dr. Oz, and Gwyneth Paltrow. All those celebrities are making wellness the new cool. “He doesn’t take care of himself” has become the ultimate put-down.
But, as the wellness revolution overtakes your workplace, you, the employee, have to beware. Much of it isn’t ready for prime time. Meanwhile, your medical insurance, job security, and peace of mind could be in jeopardy.
A strategic initiative
About 80 percent of employers offer wellness programs. This is not altruism. Or a return to old-line corporate paternalism. For companies, wellness is a key strategic initiative. In the U.S., workplace wellness has evolved into a $6 billion industry. That’s a sign of its importance to employers.
The number-one mission of wellness programs is this: Reducing the company’s costs of covered medical claims, workers’ compensation, short-term disability, and sick days. If you are normal weight, that runs about $3,830. If you are morbidly obese, that could total $8,067. You bet, companies have to take your health, present and future, seriously. Therefore, they are eager to track unhealthy lifestyle habits, ranging from smoking cigarettes to consuming too many carbs and fats. They may also want data about your family history so they can anticipate your vulnerability to certain genetic diseases.
However, too many employers have been making major mistakes in how they are approaching that cost challenge. No surprise, problems associated with those programs have developed. Those include lawsuits, head-scratching about what the programs are actually accomplishing, and bad publicity. In addition, there have been push-backs by employees. Recently, faculty members at Penn State University won a victory in getting rid of parts of the wellness program they perceived as intrusive or punitive. There could be copy-cat action by other well-organized groups of employees.
The Legal Part
At one time, workplace wellness programs were voluntary. You could participate or not. There were carrots, but no sticks. If you allowed blood tests to assess your health risks, what you paid toward the company health insurance could be less.
Then, the carrot began to be replaced by the stick. Programs, such as at plastic maker Flambeau, were coercive. On the surface, they are positioned and packaged as voluntary. However the penalties are severe so legal experts tend to classify them as involuntary. For instance, not participating could result in the loss of company-covered medical insurance. When that happened to Flambeau employee, Dale Arnold, he filed a lawsuit. He lost. In two other similar lawsuits, the employees also lost.
Legally, this has stirred up a hornet’s nest of controversy.
David Harrison, an attorney and a longtime employee in the corporate world, tells Medium, “Although I am not a believer in compulsion, even if the court supports the potential for it, I think this particular requirement is for the good of the employee and also the system. People have to take some responsibility for their health, controlling those parts of it that can be controlled, and not just passing off the costs of neglect to others. This is a good incentive for it.”
On the other hand, the Equal Employment Opportunity Commission (EEOC) is pushing back. In the Flambeau situation, the EEOC filed a lawsuit contending that the wellness program was not in compliance with the Americans with Disabilities Act (ADA). According to the ADA, in a wellness program which contains an assessment of a health risk, the participation must be totally voluntary. That means no penalties.
Other grounds for challenging the legality of mandatory wellness programs include:
- Health Insurance Portability and Accountability Act (HIPAA). This requires employees’ medical records be confidential and limits how the data can be used.
- Genetic Information Non-Discrimination Act (GINA). Makes it illegal to request/require/collect genetic information in relation to wellness program or incentives.
- Age discrimination in Employment Act (ADEA). Targets for “health” must factor in age.
If your company gets caught in the litigation loop, that’s expensive. Funds could get siphoned off from growing the business and increasing your compensation. Also, litigation tends to distract the whole company from the business of its business. Since litigation, with all its appeals, is a slow-moving process, that could last for years.
The bottom line
Another problem with wellness programs is that it’s unclear what kind of return on investment (ROI) they yield. There are two major versions of the payback story. They conflict.
In 2010, Harvard researchers published their positive findings about high-functioning corporate wellness programs. For instance, Johnson & Johnson had the ROI of $2.71 for every dollar spent. At MD Anderson Cancer Center, lost days declined by 80 percent and workers’ compensation insurance premiums by 50 percent. In addition, turnover where there were well-structured programs was lower than where there were poorly designed ones — 9 percent versus 15 percent.
A significant thing to notice in the results is that they were produced by programs assessed as top-drawer. That might account for the significant difference in what the Rand Corporation had found later.
In studying 600,000 employees at seven employers, Rand concluded, “… wellness programs are having little if any immediate effects on the amount employers spend on health care.” Those results were confirmed by another study Rand conducted. That analyzed 10 years of wellness data at a Fortune 100 company.
The ROI was so minimal, concluded Rand, because of two reasons. One, they observed, was that not every risk factor will produce a disease. For example, not every overweight employee becomes diabetic. And, two, diseases usually take a long time to develop. Therefore, you might have been encouraged to monitor yourself for what might never happen. Or not for a long time. Obviously, then, you might suffer unnecessary anxiety. That could lower your productivity at work.
Meanwhile, wellness programs invested in 2015, on the average, $693 per employee. For large companies, that could have been $878. Annually, that keeps going up. In 2014, as opposed to 2015, a large company typically had invested about $717.
Clearly, there are big question marks about results. Yet the programs continue receiving more funding. For a large company with 200,000 employees, the huge expense of the wellness program could come to the attention of activist investors such as Pershing Capital or Starboard. While they are investigating the ROI of the wellness program at your company, they could also be assessing if manpower can be reduced. A reduction-in-force (RIF) usually gives an uptick to the stock price. That’s exactly what activist investors want.
The current controversy over mandated wellness programs could damage your company’s brand. That could reduce its revenue and profits, putting your employment at risk. It can also lower the value of your shares of stock in that company.
Yes, you should be concerned. Public perception or the court of public opinion often has more impact on a business than what goes on in the court of law. That is exactly why public relations (PR) is one of the fastest growing fields. Media, ranging from Bloomberg to The Nation, have published negative articles about forced wellness.
Gene Grabowski is a partner at Washington D.C.- based PR firm kglobal, which advises companies on employee communications. He tells Medium:
“Employers who want to control health insurance costs are well-advised to enlist their workers as partners in the effort, rather than treating them as employees who must be coerced into complying with the company’s healthcare plan.
“It’s essential that companies use straightforward language that relies on the workers’ self-interest in keeping health insurance costs as low as possible. That language must be transparent and never legalistic, condescending or suspiciously flowery.
“Companies should inform workers that they have every right to resist complying with the cost-containment program, but by doing so, they may forfeit their ability to participate in their organization’s health insurance program. Workers who resist should be made to feel that they are exercising their right, not violating a rule.”
The odds of a media mauling for your company’s forced participation are high in this era of populism. The Trump phenomenon shows how public perception is tilted against the “establishment.” The more prestigious your company, the more vulnerable it presently might be to the pile-on of negative publicity. In August 2015, The New York Times published a feature about horrific work conditions at Amazon. Evidence that it touched the nerve center of Amazon leadership was how often the company issued detailed rebuttals.
Growing awareness of flaws in programs
Despite these three kinds of problems, the wellness revolution in the workplace will continue. According to the survey by Fidelity and the National Business Group, wellness programs are not only here to stay. Companies without them plan to start one.
The good news here is that some companies are recognizing that the design of programs needs to evolve. Currently, that includes expanding incentives. They include employer-sponsored health savings accounts, flexible spending accounts, and opening participation to spouses and domestic partners. There is less focus on penalties.
In a decade or even sooner, an analysis of labor relations in the U.S. might frame the mandated programs as this: an unfortunate phase in configuring wellness as a new kind of benefit.
There was similar controversy when companies assigned executive coaches to employees whose performance needed to be improved. Frequently employees perceived it as punishment, not a developmental tool. In his book “Necessary Endings,” coach to the C-suite, Henry Cloud noted how unusual it was for an executive to welcome being assigned him as a coach. That was 2011. In the current volatility, there’s been more acceptance of the utility of a coach.
The wellness branding edge
A well-managed program which both generates results and is loved by you employees can be the platform for unique branding for your company. That can happen through the kind of partnership Grabowski recommends. The collaborative effort can give your company a branding edge. For example, its “signature” could be that it is the rare enterprise in technology where all employees have mastered the art of work/life balance. In return, you could be earning more, have greater employment security, and be bursting with good health and good feelings about your company.