Category — Creating a Corporate Wellness Program

Obesity

Obesity, one of the fastest increasing epidemics in America, is the most prevalent health risk among staff members. Obese people are at a greater risk for several chronic diseases such as congestive heart failure, type 2 diabetes, stroke and hypertension. Facts:

• The prevalence of overweight and obesity has doubled since 1980.
• Two-thirds (66.3%) of the population is overweight or obese (using Body Mass Index as a measure); 32.3% are corpulent.
• Obesity has roughly the same association with chronic health conditions as 20 years of aging.
• More than 20% of very overweight staff members have low morale, almost twice that of staff members of healthy weights.
• Overweight and Obesity health care claims cost around $92 billion in 2002, 9.1% of all United States Medical Care expenditures.

Mental Illness

Often ignored or misdiagnosed, mental illness is one of the most disruptive health problems in employers. It is unique in that its indirect costs (especially presenteeism) are frequently higher than its direct health care costs. Facts:

• Approximately 20% of the United States population is affected by mental illness during a given year, with the most common form being depression; yet in 1997, only 23% of adults diagnosed with depression received treatment.
• In 2001 mental illness and substance abuse treatment cost more than $104 billion, comprising 7.6% of domestic Medical Care spending.
• Around 217 million days of work are lost each year due to productivity decline from mental illness and substance abuse disorders, costing $17 billion each year.
• Depression is one of the most costly workplace health problems, costing the United States $43.7 billion each year, including workplace costs for absenteeism and lost productivity.

Smoking

Though smoking rates have gone down slightly in America over the past decade, smokers still make up 21.1% of the population. For many employers, limitations on smoking in facilities means a greater loss of productiveness during breaks, adding to the costs of the practice. Facts:

• The United States Center for Disease Control and Prevention (CDC) puts a $3,391 price tag on each employee who smokes: $1,760 in lost productiveness and $1,623 in excess health care expenditures.
• Staff Members who use tobacco had about two times more lost production time (LPT) per week than staff members who never smoked, a cost of $27 billion to employers.
• An economic assessment found that a Medical Care plan’s annual cost of covering treatment to help people quit smoking ranged from $0.89 to $4.92 per smoker, whereas the annual cost of treating smoking-related illness ranged from $6 to $33 per smoker.
• The direct and indirect costs of smoking are estimated at $138 million per year.43 Finding Wealth Through Wellness 19 • Quitting smoking could lower an individual’s Medical Care costs by $960 each year.
• Secondhand smoke costs the United States economy roughly $ten billion a year: $5 billion in estimated health care costs associated with secondhand smoke exposure, and another $4.6 billion in lost wages.
• From 1997-2001, tobacco use and exposure to tobacco smoke resulted in approximately 438,000 premature deaths in America, 5.5 million years of life lost, and 92 billion dollars in productivity losses each year.
• Smokers, on average, miss 6.16 days of work per year due to sickness (including smoking related acute and chronic conditions), while nonsmokers miss 3.86 days of work per year.
• Each smoker who successfully quits decreases the anticipated health care costs associated with heart attack and stroke by an estimated $47 in the first year and $853 during the following seven years.

What began more than a decade ago as a pilot program in two locations, has now developed into a global plan for Motorola. The employer’s Corporate Wellness is run by the Global Rewards team consisting of more than 50 staff members and funded by an annual grant. Programs are consistently judged on their ability to deliver a positive return on investment and profit the collective Motorola community. overriding, the program reaches more than 30,000 staff members, family members and retirees.

Corporate Wellness Features:

• The employer provides no cost membership for active staff members to Wellness Centers located at 8 United States sites (retirees pay a small fee).
• Staff Members at locations without a Wellness Center receive $240 to help cover the cost of a membership at a qualifying fitness center.
• In 2003, the employer provided flu immunizations to more than 11,000 staff members, dependents and retirees at 70 on-Site locations.
• Motorola holds hundreds of health education classes each year for staff members.

Corporate Wellness Solutions:

• Among staff members who regularly used on-Site Motorola Wellness Centers or an alternate fitness center the employer saved $3.93 for every $1 it invested, according to data from 2000.
• Participating staff members cost $6.5 million dollars less in lifestyle-related health care expenses than non-participants.
• Corporate Wellness participants experienced annual Medical Care cost rises of 2.5%, compared to 18% rises for non-participants.

Rising Medical Care costs show no signs of slowing in the near future. Hewitt projects Medical Care costs will jump another 9.9% in 2006, amounting to more than $11,000 per family (of which the employer will absorb more than 60% of costs). More than nine of ten members of upper management see increasing Medical Care costs as a genuine employer issue that their employer needs to address.26 The current Medical Care climate represents an ideal opportunity for employers to reevaluate their Corporate Wellness offerings and consider the more systemic approach of a robust Corporate Wellness . Despite the large number of employers that claim to offer disease management or Corporate Wellness activities, as of 2005 only 23% of staff members were eligible for Corporate Wellness and only 13% were provided access to a fitness center through work.27 This is despite evidence that nearly two-thirds of staff members would be open to employer-provided HRAs and enrolling in programs that encourage healthier lifestyles.28 Corporate Wellness are a chance for employers to differentiate themselves from competitors by increasing productiveness, cutting costs and establishing a healthier work environment that is valued by current and prospective staff members. Nearly onethird of staff members polled in a 2004 study by MetLife given benefi ts as an important reason why they decided to work for their employer and 38% said it is among the top reasons they remain at their work.29 Gary Grates, global director of Edelman’s Change and Employee Program Engagement Group, notes, “The return on investment in a Corporate Wellness extends well beyond monetary Medical Care savings. These programs can play a essential role in creating a more engaged workplace environment where staff members are aligned with employer goals/objectives. Corporate Wellness can represent more than a human resources(HR) plan, they can be a bold symbol of what you as a employer stand for.” To date, employers have viewed Corporate Wellness as merely another benefit to be managed by the human resources(HR) department. Nevertheless, executives, and their employers, would be better served by adopting a more strategic and integrated approach to Corporate Wellness . Organizations that are able to develop Corporate Wellness based on sound assessment, work within existing regulations, and engage staff members around initiatives, will reap valuable rewards in terms of cost savings and long-term strength.

After cost, poor employee engagement and inadequate communications and backing are listed as the greatest challenges for employers administering any health benefi t program.22 By law, employers are required to explain any benefits or explicit conditions of employment to all staff members – this is called “due process,” and it usually takes the form of a packet of information that new staff members are asked to review and sign during orientation or, in the case of existing staff members, a brief communication during open enrollment periods. Organizations that only engage in the minimally needed due process communication of a Corporate Wellness , however, do a disservice to the plan and the employer. Opinions about Medical Care in employers represent one of the largest divides between management and staff members. In discussing the need for savings, most employers (70%) believe their employer effectively communicates about increasing Medical Care costs, while only 34% of staff members feel increasing Medical Care costs influence their business’ ability to succeed.23 When it comes to behaviors, 74% of employers believe their staff members ought to be held largely accountable for improving, managing and maintaining health, yet only 4% of employers think that staff members engage in these activities. Under the proposed rules, the four requirements to be a bona fide Corporate Wellness are:

• The total reward that may be given to an individual is limited. The departments invited comments on the appropriate level of the reward, suggesting that a limit of ten% to 20% of the total cost of employee-only coverage may be appropriate.
• The program must be reasonably designed to promote great health or prevent disease for people in the program.
• The reward must be available to all similarly situated people. More specifically, the program must allow any individual for whom it is unreasonably diffi cult due to a health care condition to meet the Corporate Wellness standard (or for whom it is medically inadvisable to attempt to meet the Corporate Wellness standard) an opportunity to satisfy a reasonable alternative standard.
• All plan materials describing the terms of the program must disclose the availability of a reasonable alternative standard.

Source: United States Department of Labor Employee Benefits Security Administration

As Northwestern Memorial’s Kathryn Krivy says, “The most fundamental failure in any Corporate Wellness is not communicating. You need to tell people what you’re doing and why you’re doing it. You have to get staff members engaged and teach them of what’s going on.” A properly started Corporate Wellness is designed to save a employer more money with greater participation. Nevertheless, a employer must match its focus on program design with an equally strategic investment in efforts to engage staff members in the initiatives. Lay out your case – Despite widespread recognition of increasing Medical Care costs, staff members remain skeptical that the issue impacts employer operations. In fact, only 53% of staff members even believe what their employer communicates about the subject.24 Organizations need to be more candid and forthcoming about the amount they spend on Medical Care and how that relates to larger budgetary constraints and potential investments. Says Motorola’s Saenz: “We share with staff members that we have been able to maintain Motorola’s Medical Care spend trend below national average over the past several years due to their participation in our various Corporate Wellness . This transparency is necessary to keep reminding people the reasons for our behaviors.” An effective strategy is to focus on the cost savings and overriding health benefi ts to the employee and not the employer. By personalizing the information in this way, it establishes a win-win scenario rather than presenting the program as a sacrifi ce on the part of the employee. Information ought to be presented through multiple channels, constructed in a way that makes sense to all levels of staff members, and provided to staff members, dependents and retirees. Make it your own – Every Corporate Wellness will be different, and ought to reflect the culture of a employer. While program areas will be determined by analyzing employee health risks, the actual offerings ought to be shaped by the nature of the employer. Younger, more active employee communities may be attracted by different programs than an older or technicaloriented employee. Additionally, a global employer with mobile staff members will have different needs than a employer with one central location. As noted earlier regarding PepsiCo’s HealthRoads, one strategy is for employers to brand their Corporate Wellness . Union Pacifi c Railroad (HealthTracks), General Motors (LifeSteps) and Caterpillar (Healthy Balance) all adopted this approach to help create recognition and a larger meaning around their efforts. Having a branded plan helps staff members and other stakeholders see the larger goals/objectives of the Corporate Wellness , rather than focusing on isolated offerings. Say it loud, say it proud – As a potential cost-saving plan, Corporate Wellness ought to be given the same executive backing and internal responsibility as any comparable employer effort. Organizations ought to not approach wellness as simply a preventive, financially-motivated program, but rather as an opportunity for the employer to distinguish itself and become more competitive. Jeffrey Treem, analyst, Edelman Change and Employee Program Engagement Group, says that effective communication about Corporate Wellness ought to be integrated into existing employer communication channels and vehicles. “This covers executive communication to external stakeholders,” he notes, “because this sends a powerful message back to staff members about the significance of the programs. Corporate Wellness ought to not be treated as merely an additional employee perk, but rather an innovative and strategic effort to lower costs and create a healthier work environment.” Talk among yourselves – The most powerful champions of any Corporate Wellness will be the participants. Organizations ought to discover ways to facilitate discussions about the program among staff members. This could take the form of support groups, interactive media and the sharing of success stories. Nevertheless, since Corporate Wellness touch on potentially private health problems, it is valuable communication remains positive and inclusive, while not pressuring staff members. Discussion of wellness problems ought to be voluntary, though employers may consider providing incentives and rewards for those willing to contribute. Motivation and information from peers is likely to carry more credibility and significance than messages from management.

Even in an at-will employment environment, people are still guarded from discrimination (including wrongful termination) by virtue of belonging to a protected class. Prior to beginning a Corporate Wellness , employers need to be cognizant of the relevant legal restrictions and the potential impacts these measures can have on benefi ts and employee behavior programs. Title VII of the Civil Rights Act of 1964 – Prohibits employment discrimination based on race, color, religion, sex or national origin. This means that standards and offerings need to be applied equally (or possibly proportionally) to all protected classes. In other words, if a employer is offering access to fitness centers, it ought to ensure that men and women have equal access to facilities. Organizations ought to also consider whether individuals who may live in areas heavily populated by one race, religion or ethnicity also have access to facilities and programs. The easiest way to address this concern is to provide on-Site Corporate Wellness whenever possible. This not only ensures equal access, but according to Northwestern Memorial’s Krivy, also boosts participation. Organizations must also be aware that particular health problems may disproportionately affect protected classes. Health Risk Assessments and any incentives and rewards put in place may really should be personalized to account for non-lifestyle related differences. The Equal Pay Act of 1963 (EPA) – Protects men and women who perform substantially equal work in the same establishment from sex-based wage discrimination. Benefits, incentives and rewards and programs need to be applied equally to men and women. A employer can’t set a weight goal for men and not for women, although a employer can set health parameters by work function. The Age Discrimination in Employment Act of 1967 (ADEA) – Protects people who are 40 years of age or older from discrimination based on age. Policies not only need to be available to people of all ages, but program goals/objectives, restrictions and incentives and rewards need to be designed with age appropriateness. While older staff members (or retirees and dependents) may inherently pose a higher health risk, their behaviors ought to be judged in terms of demographically appropriate measures. Title I and Title V of the American citizens with Disabilities Act of 1990 (ADA) – Prohibits employment discrimination against qualified people with disabilities in the private sector, and in state and local governments. Similar to other workplace offerings, any Corporate Wellness , such as a fitness center or health clinic, would have to make reasonable accommodations for staff members with disabilities. One area of uncertainty is whether corpulent staff members qualify as disabled. The issue is complicated because obesity is caused by several factors (genetics, environment, behavior), some of which may be out of the employee’s control. Generally, for staff members to qualify for disability based on obesity, the condition must signifi cantly impair their physical or mental ability to perform their job. This determination would need to be made by a qualifi ed physician. Although this label may affect the types of incentives and rewards and program requirements offered, it likely would not affect the overriding implementation of behavioral-focused initiatives. Civil Rights Act of 1991 – Provides monetary damages in cases of intentional employment discrimination. This legislation allows people to sue employers for improper treatment. Compensation can be in the form of actual damages such as lost or expected wages, compensatory damages for a situation that causes public embarrassment, or even punitive damages meant to send a message to a employer for egregious or habitual violations. While these laws govern all employer activities, there are even more stringent restrictions with regard to Medical Care problems. Most policies, communications and data collection regarding employee health are governed by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Under HIPAA employers can’t deny eligibility for benefits or charge a higher premium on the basis of:

• Health status
• Health condition (including both physical and mental illnesses)
• Claims experience
• Receipt of health care
• Health history
• Genetic information
• Evidence of insurability (covers activities such as riding a motorcycle, skiing, snowmobiling and other similar pursuits)
• Disability

Nevertheless, because wellness programs may not incorporate health care treatment or be insurance related, and may instead be confined to behavioral initiatives, HIPAA’s nondiscrimination provisions do not totally apply. To address this, in 2001 the United States Department of Labor, the Internal Revenue Service and the United States Department of Health and Human Services jointly issued a proposed regulation to help clarify the lawful provisions of a “bona fi de Wellness Program” in the context of HIPAA’s existing language (See Box p. 14). Although the regulation is not yet final, employers that comply with the measure will be viewed by the government as making a good-faith effort to avert discrimination in wellness programs. Complete Corporate Wellness are still relatively new to corporate America and the legal implications of implementation and enforcement are not totally known. By their very nature, these programs potentially expose employers to discrimination lawsuits, disengaged staff members and harmful public relations. Nevertheless, employers that make a good-faith effort to comply with current Medical Care-related laws, discover ways to engage staff members, and communicate strategically, will be able to minimize these risks while finding plenty of room to develop a creative and effective Corporate Wellness .

For many employers, a smoking ban would not even apply to all staff members. That is because currently 30 states and the District of Columbia prevent employers from banning off-duty smoking.21 Additionally, 13 states prevent employers from banning alcohol use away from work. Only six states have broad statutes that prevent employers from prohibiting any lawful behavior. Michigan is the only state that expressly prohibits discrimination on the basis of weight, however the cities of San Francisco and Santa Cruz, Calif., also have this provision (San Francisco makes exceptions for police offi cers, fi refi ghters and the San Francisco 49ers football team). When designing Corporate Wellness , employers ought to keep in mind local statutes as well as established common law. Savings of Voluntary Corporate Wellness = (number of participants x savings per participant) – (cost of program) Savings of Incentive-based Corporate Wellness = (number of participants x savings per participant) – (cost of program + cost of incentives and rewards) Savings of Mandatory Corporate Wellness = (number of participants x savings per participant) – (cost of program + cost of policy-related turnover + cost of limited talent pool) Constructing Corporate Wellness policies in a employer that employs unionized staff members can pose unique challenges. Corporate Wellness may be perceived by some unions as a condition of employment and therefore would be subject to collective bargaining between the parties. Nevertheless this situation can represent an opportunity for both groups, as a policy agreed upon between union leadership and management is likely to be received more favorably by staff members. The United Auto Staff Members and General Motors worked together to create and position a joint Corporate Wellness which has successfully reached more than 800,000 participants. (See Case Studies, UAWGeneral Motors LifeSteps Corporate Wellness , p.21).

Unless specifically stated otherwise, most employer-employee relationships in America are governed by the principle of at-will employment. Under this system a employer, or the employee, can terminate the relationship without any needed showing of cause. This at-will standard gives private employers large authority in governing the behavior of staff members. In this environment, employers can Finding Wealth Through Wellness 10 creatively design Corporate Wellness based upon their specifi c corporate culture. Corporate Wellness generally take three main forms: Voluntary Corporate Wellness – The most popular form of employee Corporate Wellness , in most cases they are made available to staff members but participation (or lack thereof) is not linked to any type of consequence. Due to ineffective communication, frequently staff members are either unaware of these offerings or confuse them with insurance-based healthcare. Incentive-based – Corporate Wellness based on incentives reward staff members for participation in Corporate Wellness activities. Incentives frequently cover reduced Medical Care premiums, fitness center membership or personalized support offerings. In these programs, employees’ behavior can be linked to a particular reward. Mandatory Corporate Wellness – Some employers require, or ban, certain health-related behaviors. These can take the form of mandatory Health Risk Assessments for staff members and limitations on smoking or alcohol use. While mandating behavior is an effective method to eliminate high-risk behavior, the cost savings must be gauged against the potential message sent to existing and prospective staff members. Given that staff members are already under various levels of scrutiny in the workplace, individuals may resist attempts by employers to regulate off-duty behaviors. Additionally, some staff members may fi nd it diffi cult to comply, forcing employers into the uncomfortable situation of punishing an otherwise beneficial employee. In the short-term a mandate-based Corporate Wellness can drive to an increase in turnover, as staff members either choose to leave or are fi red for noncompliance. In the long-term, the policy may prevent the employer from hiring an otherwise qualifi ed applicant, or may serve as a deterrent for individuals thinking of the employer. Limits in recruiting, for instance, led CNN to rescind a 13-year ban on hiring smokers.18 Organizations need to make sure that Corporate Wellness are aligned with the values and culture that drive employer operations. If a employer emphasizes trust and individual responsibility, then a mandate-based program will likely cause more dissension than it would in a employer that already heavily regulates employer behaviors. Moreover, a work environment with a large disengaged population will likely have poor participation in a voluntarybased program. When calculating cost savings, employers need to take a wider view and consider the effects on long-term employee engagement. In 2005, Michigan-based insurance benefits provider Weyco instituted a smoking ban for all of its nearly 200 staff members. Staff Members are subject to random testing and if they fail a mandatory breathalyzer test, they will be fi red. It is believed that Weyco is the first employer to use testing to enforce a smoking ban – most employers ask staff members to self-report behavior. Four staff members (more than 2% of the total crew) left Weyco as a result of the policy. A year prior to the ban the employer started a $50 smoking fee, which would be waived if a employee passed a nicotine test or agreed to take a smokingcessation class. Weyco’s president Howard Weyers reported that 20 staff members quit smoking through this program.20 Staff Members were told they had one year before the total ban would go into effect. Under the new Corporate Wellness , Weyco does offer $35 a month for staff members who want to use a fi tness center and another $65 a month for staff members who meet fitness goals/objectives.

1. 1. Undertake a utilization assessment – While employers can’t obtain health information on individual staff members, insurance providers will supply employers with reports that detail patterns and rates of employee use for things such as physician visits, hospital stays and prescription drug use. This information is essential for a employer to set a benchmark of its current health risk status. Data from human resources(HR) can be integrated with benefits information to provide a complete picture of employees’ health-related costs. Then, employers can determine the specific level of behavior transformation necessary to result in cost savings. The utilization assessment helps a employer identify the areas in which it ought to focus its Corporate Wellness to reap the greatest benefits.
2. 2. Build a employer case – Once a utilization assessment is in place, employers are able to quantify the Medical Care cost savings that will result from specific levels of lifestyle transformation and risk reduction. This can be done by setting goals/objectives in terms of reductions in identifi able insurance utilization, attendance or disability variables, or by aiming for reductions in health risks and projecting the associated cost savings. Effective estimates factor in the cost of the Corporate Wellness as well as the necessary internal marketing efforts that will surround the program. Says Betty-Jo Saenz, United States Medical Care Strategy lead for Motorola, “When we started our programs, our focus was on the 20% of staff members that made up 80% of the costs. We’ve discussed that, and now we’re paying attention to those who are healthy and Finding Wealth Through Wellness 8 keeping them healthy. Wherever you are on the continuum, there are opportunities.”
3. 3. Design a cross-functional wellness team – Organizations need to identify potential team members who can be champions of wellness within the employer. It is valuable that the team is representative of the demographic and functional diversity of staff members so that it can credibly address any specific needs groups may have. This team will serve as the voice and face for the Corporate Wellness within the employer. Best practice employers integrate members from human resources(HR), communications, employer development and upper management. Using the utilization analysis as a model, the wellness team ought to evaluate what programs would be most effective within each particular corporate culture, aligning health-risk priorities with initiatives that staff members will be receptive to.
4. 4. Build buy-in from upper management – The most effective Corporate Wellness have backing from the highest levels of a employer. Support from management, both in words and in action, sends the message that Corporate Wellness are a priority for a employer. The utilization analysis can be a powerful tool to build the employer case for Corporate Wellness and convince executives that initiatives are worthy of investment and attention. Meaningful wellness-related messages are integrated into employer communications and aligned with corporate objectives.
5. 5. Design a comprehensive Employee Program Engagement plan – The most brilliantly conceived Corporate Wellness is meaningless if no staff members take part. Effective wellness communications emphasize both health and monetary benefits at the personal and employer level. According to a 2004 survey by Towers Perrin, only 28% of staff members say their employer communicates about Medical Care problems other than cost. In addition, wellness-related information ought to be a part of existing employer communications efforts and not coupled solely with benefits communications. This helps elevate the significance of Corporate Wellness and align initiatives with employer objectives.

Moreover, communications around Corporate Wellness can share personal success stories and provide employer progress updates. Successful employers not only use existing talking channels to generate discussion around activities, but also consider more interactive tools like message boards, forums, blogs and wikis. This helps personalize initiatives and allows for the sharing of best practices within the employer. Most employers engage health care experts to advise in the construction, communication and backing of the program. The use of outside authorities such as these will increase the credibility of the Corporate Wellness as well as combat skepticism from staff members who may view the employer’s motives as merely selfserving. Another strategy available to employers is to brand their Corporate Wellness . This move can increase the visibility and acceptance of the offering. Branded wellness programs are most common when employers are also promoting an external campaign around Corporate Wellness . An example of this is PepsiCo, which launched its HealthRoads Corporate Wellness internally along with a consumer campaign, Smart Spot, that puts special labels on healthier food and drink options. These efforts are more effective when they are not owned solely by the internal communications department, but rather when managers serve as leaders of, as well as take part in, Corporate Wellness within employers. This establishes more immediate accountability and motivation. 6. Measure constantly and consistently – At every step of implementation, a Corporate Wellness must be able to corroborate its value to a employer. Corporate Wellness ought to be designed to allow employers to set benchmarks and evaluate behavior transformation. Assessment ought to consider not only quantitative health measures, but also qualitative measures of stress and employee engagement. Less than ten% of employers do extensive management of health care cost, employee health risk status or employee satisfaction with benefit offerings, and less than half of employers do any assessment in these areas at all.16 Assessment is only useful if a employer explicitly specifies what data would constitute success. Potential measures of success cover:

• Participation rates
• Greater employee engagement
• Lowering of risk status
• Lowering of direct health costs
• Reduced absenteeism
• Reduced disability claims

Motorola’s Saenz advises administrators of Corporate Wellness to track as many measures as possible from the start, even if management only requires one, because it is very difficult to retrieve data later. She notes that even if leadership begins by looking at participation rates, they will eventually want to know about reductions in claims and costs. Frequent assessment is the only way to build backing among management and staff members. Nearly half of employers feel a lack of useful data is a top barrier to their ability to manage employee health, and at least 20% of employers don’t know how effective existing Corporate Wellness are regarding various outcomes. Organizations ought to conduct utilization analyses each year and reevaluate Corporate Wellness priorities based upon changes. Additionally, progress ought to be shared with the wider business community to build backing for initiatives. Managers and executives throughout a employer are likely to backing a program that can prove increased productiveness among staff members. Effective Corporate Wellness are designed to be fl exible so they can respond to changes in both employer goals/objectives and larger health variations.

Corporate Wellness first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site fitness centers and massages, and were used as recruitment tools for young staff members searching for nontraditional work environments. Nevertheless, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and employers returned to a more antiquated benefit structure focused on managed healthcare. In recent years, as Medical Care costs have spiraled out of control, employers have explored the potential of Corporate Wellness as a cost-saving strategy. Organizations such as Johnson and Johnson, General Motors, Motorola and Union Pacifi c Railroad have all seen a signifi cant return on investments in employee health (See Case Studies, p.20). Corporate Wellness can help decrease the costs associated with: Medical Care premiums – The cost a employer pays for healthcare insurance: According to a 2005 study by Hewitt, the Medical Care cost per employee in the United States in 2006 will average $8,046, with employers absorbing nearly two-thirds of that cost. Pharmaceutical costs – The price of a prescription drug plan: According to a 2005 study by Mercer, the average annual prescription drug costs for large employers grew 11.5%, making it nearly a decade straight of double-digit rises in cost. Short-term disability (STD) – The price of offering short-term disability insurance to staff members: According to a 2004 study by insurance provider Cigna, the average short-term disability claim results in $13,094 in direct disability payments and health care costs. The report also found that 26% of claims related to health care events were a result of chronic conditions that could likely be mediated through Corporate Wellness , and that these cases amount for 56% of the STD-related health care costs. Rates of Absenteeism — The price of missed work: Rates of Absenteeism cost employers $660 per employee in 2004, with nearly one-third of employers characterizing the trend as a genuine issue. Presenteeism — The price associated with staff members who work at decreased productiveness levels: Sixty% of the total cost of employee diseases come from presenteeism, according to a 2004 study by the Institute for Health and Productivity Studies at Cornell University. The evidence is clear that strategically designed Corporate Wellness can decrease both direct and indirect Medical Care costs. A 2004 review of Corporate Wellness revealed that, in total, an investment of $1 by a employer in Wellness Programming returned a median cost savings of $2.05 to $4.64.

Employee Program Engagement is the level at which staff members are aligned with and working toward employer goals/objectives. Employee Program Engagement is altered by a wide range of factors that include internal communications, employer structure, benefits and recognition. Organizations that have high levels of employee engagement profit from greater productiveness, retention and achievement than peers with disengaged staff members. Levels of engagement among staff members in America have been declining over the past several years as individuals have become disillusioned with the treatment of staff members by employers. The inability to engage staff members is one of the reasons why, despite steady rises in hours worked, America lags behind several other nations in terms of employee productivity per hours worked. Corporate Wellness may increase employee engagement in several ways. First, when communicated properly, they corroborate to staff members that the employer cares about their wellbeing. This can improve retention and turnover as well as provide a greater discretionary effort from staff members. During a period of significant downsizing, Motorola found a greater interest in its Corporate Wellness as managers recognized the value of providing for the health and wellbeing of staff members. In addition, the health improvements will decrease presenteeism and absenteeism (when staff members continue to work despite decreased productiveness), allowing for more time invested at full productiveness. Lastly, healthier staff members are more likely to have increased morale, which translates into a more enjoyable and more effective work environment.