Workplace Wellness: Improving Health and Controlling Health Care Spending
by Meredith K. Olafson, Community Moderator
- Created: June 4, 2013, 4:31 pm
- Updated: June 4, 2013, 4:31 pm
According to the U.S. Department of Health and Human Services, chronic disease is responsible for 7 out of 10 deaths among Americans every year. And we know that the costs associated with treating individuals with chronic conditions account for the majority of annual spending on medical care. Across the country, more employers are learning how nondiscriminatory employer-based prevention and wellness programs can help improve the overall health of our workers and control health care spending—and the Affordable Care Act is making it easier.
The Cost of Chronic Disease and the Benefits of Workplace Wellness
HHS reports that the cost of treatment for those with chronic conditions like heart disease, cancer, strokes, and diabetes accounts for over 75% of our annual medical care costs. In addition to these direct costs, the indirect costs associated with poor health --such as worker absenteeism, reduced productivity, and disability -- may be significantly higher. According to the Centers for Disease Control and Prevention (CDC), these productivity losses due to personal and family health issues can cost U.S. businesses $1,685 per employee per year, or $225.8 billion annually.
So how can you help your employees protect against illness, while also ramping up your workplace productivity?
Workplace wellness programs can help promote healthy behaviors and improve employees’ health-related knowledge. They also help employees get important health screenings, immunizations, and follow-up care. Implementing and promoting workplace wellness programs such as those that reward employees for achieving targeted health-related standards can help improve the health of America’s workforce and reduce long-run costs.
New Incentives for Workplace Wellness Programs under the Affordable Care Act
The Affordable Care Act creates new incentives to promote employer wellness programs and encourage employers to take more opportunities to support healthier workplaces. Health-contingent wellness programs generally require individuals to meet a specific standard related to their health to obtain a reward, such as programs that provide a reward to employees who don’t use, or decrease their use of, tobacco, and programs that reward employees who achieve a specified level or lower cholesterol.
Under finalized rules that take effect on January 1, 2014, the maximum reward to employers using a health-contingent wellness program will increase from 20 percent to 30 percent of the cost of health coverage.
Additionally, under the final rules, the maximum reward for programs designed to prevent or reduce tobacco use will be as much as 50 percent. The rules also allow for flexibility in the types of wellness programs employers can offer. More information on the finalized rules is available from HHS and the U.S. Departments of Labor and Treasury.
Workplace Wellness How-To’s and Resources
To help you get started, or to expand your workplace wellness program, the Centers for Disease Control and Prevention has a great set of online resources, including toolkits, tips on program design, and a “one-stop” shop for online program resources.
To view the final rules related to new incentives for employer wellness programs under the Affordable Care Act, click here.
For more information about preventive services covered under the Affordable Care Act such as blood pressure and cholesterol screenings, mammograms, colonoscopies, screenings for osteoporosis and more, go to http://www.healthcare.gov/law/features/rights/preventive-care/index.html.
About the Author
Meredith K. Olafson is Senior Policy Advisor for the U.S. Small Business Administration where she oversees the agency's education and outreach efforts around health care and the Affordable Care Act.
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About This Blog
This blog is provided for informational purposes only and is not intended as legal or tax advice. Readers should consult their legal or tax professionals to discuss how these matters relate to their individual business circumstances.
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