Employment Resources

The Patient Protection and Affordable Care Act, signed into law earlier this year, is beginning to bring about changes to the nation’s health care system. In July, a summit between the U.S. Departments of Labor, the Treasury, and Health and Human Services came together to issue new Preventive Regulations, in accordance with the President’s health care reform bill.

The new regulations require non-grandfathered health care plans to provide complete coverage of many preventive services for newborns, children, and adults, regardless of whether deductible costs are met. These regulations will apply for the first plan year on or after September 23, 2010.

The government has put these regulations in place in order to increase patients’ access to numerous services, such as diabetes and cholesterol tests, prostate and other cancer screenings, child/adult vaccinations, pre-natal services, and routine checkups for children and infants. In the past, many patients were required to cover deductible costs or share the cost of these services, but now preventive care will be covered on a full first-dollar basis. The new regulations only apply to in-network providers.

The Department of Health and Humans Services, or HHS, hopes that the increased access to high-quality preventive care will lead to earlier detection of disease and improve Americans’ overall health, essentially lowering health care costs. In the United States, seven out of every 10 deaths are caused by chronic diseases, such as cancer, diabetes, and heart disease. HHS estimates that 75% of the country’s health care dollars are spent on fighting diseases and illnesses that can be prevented. Additionally, the HHS states that Americans receive preventive services about half as much as they need to.

Here are a few health care services that will be covered under the new regulations:

Preventive Care. The U.S. Preventive Services Task Force selected a variety of services to be covered, including screenings for colon and breast cancer, screenings for high blood pressure and cholesterol, checkups during pregnancy, help for smokers trying to quit, and other high-priority preventive care services.

Vaccinations. Routine vaccinations selected by the Advisory Committee on Immunization Practices for children and adults are fully covered by the new regulations. These vaccines include Hepatitis A and B, MMR, Meningococcal, Tetanus, flu shots, and others.

Care for Children. All new plans will now cover the preventive services recommended by the American Academy of Pediatrics in their “Bright Futures” guidelines. Services include access to pediatricians until the age of 21, regular wellness checkups, hearing and vision screenings, developmental assessments, vaccines, and care that addresses childhood obesity.

Women’s Care. Health screenings for anemia and other risk factors in pregnant women are covered, along with screenings for breast cancer and osteoporosis in older women, as well as other preventive measures. An independent council of doctors and medical experts is currently working on new preventive care guidelines for women.

Prescription contraceptives are not currently listed as a covered preventive service, but officials from the Planned Parenthood Federation of America hope that contraceptives will begin to receive first-dollar coverage within the next year or two.

Information on all of the covered services can be found on the www.healthcare.gov website.

Evidence-based medicine (EBM) is an approach to medical care which claims that the best way to decide on medical treatments and/or practices is to continually defer to the best scientific evidence available. EBM is primarily meant to be used as a decision-making model when analyzing the best form of care for the patient. This approach supposedly integrates firsthand clinical experience with outside scientific evidence from clinical trials in order to craft the best available pool of information.

The merits or dangers of evidence-based medicine notwithstanding, a recent study published on the website of the journal Health Affairs suggests that additional education on the consumer front is necessary before more Americans will accept the practice. The study was conducted between August of 2006 and December of 2007 and collected data based on popular consumer-oriented methods such as focus groups, online surveys and interviews. The team conducting the research project also interviewed a number of professionals, specifically forty employer intermediaries like human resources staff.

Since the recent healthcare reform law includes encouragement of evidence-based medicine, the release of this study is particularly timely. The majority of the participants in the focus groups stated a belief that EBM would impinge upon the patient’s freedom to choose treatment and result in medical practices becoming artificially rigid and unresponsive to patient needs. These participants wanted the freedom to make choices about their healthcare using both their physician’s judgment and their own about quality of care.

One notable participant even went on record as saying that evidence-based medicine was a method of protecting doctors from medical malpractice liability. Obviously, such a negative denial indicates that consumer education must become a significant priority for advocates of EMB. According to Dr. Kristin L. Carman, who is the co-director of health policy and research at the American Institutes of Research, the study demonstrated the need for consumer education to fill the gaps between EMB and consumer knowledge. The study also gave cause for optimism, however. A minority of participants understood and accepted the basic tenets of EBM and expressed a willingness to increase their level of participation with their own care.

The participants in the survey also revealed an interesting aspect: just 47% of those surveyed agreed that people should pay less out-of-pocket for the most effective medical treatments. A significant minority, 33%, also believed that the better a medical treatment is, the more it should cost. Importantly, an astounding 55% of respondents stated that they did not actively participate in their own medical care. For example, these 55% said that they never took notes during medical appointments, and 28% said that they did not come prepared with a list of questions to ask their doctor.

Cafeteria plans are being altered at most companies thanks to the new rules issued by the Internal Revenue Service. If employees enroll their eligible dependents on their health insurance plans, the new cafeteria plan rules allow those employees to make immediate tax-free contributions.

According to the IRS Commissioner Doug Shulman, this change was made necessary by the new federal healthcare legislation, which was passed on March 30th, 2010. The commissioner stated that the changes give companies and businesses the chance to offer a benefit that was worth their employees’ while. He further stated that the IRS was prepared to make it as easy as possible for the new changes to be implemented and to include older children of employees in those employees’ tax-favored benefit plans.

Cafeteria plans are tax-favored insurance plans that allow employees to choose from a “cafeteria” of tax-free benefits, cash or taxable benefits.

Notice 2010-38 was issued by the IRS in order to fully explain and interpret the changes. In addition, the notice was designed to provide direction to employers, employees, insurers and other miscellaneous taxpayers.

The expanded tax benefit applies to group insurance plans for active employees and retirees, as well as self-employed workers. Self-employed workers can take advantage of this benefit if they qualify for the self-employed health insurance tax deduction.

Employees’ children who will not reach the age of 27 by the end of the current year qualify for the tax benefit starting from March 30th of this year. It makes no difference whether the children are already covered under the employer’s plan or added at a later date.

For the purposes of this new benefit, the child category includes a son, daughter, stepchild, adopted child or a qualifying foster child. This standard for the age of the child officially replaces the relevant age limits under prior federal tax law; additionally, the old requirement that a child qualifies as a dependent for tax filings is also superseded by this law.

Finally, the notice also states that cafeteria plans provided by employers can now allow employees to start making tax-free contributions for their children’s health insurance coverage even if the cafeteria plan has yet to be amended. Sponsors of plans have until the end of 2010 to amend their plans.

The Internal Revenue Service has issued guidance on the favorable tax treatment of health care coverage for employees’ nondependent adult children, to whom such coverage was extended under the Patient Protection and Affordable Care Act (“Patient Protection Act”). The Patient Protection Act requires that employer group health plans that provide for dependent coverage must continue to make such coverage available to employees’ adult children until age 26, regardless of the child’s student status and regardless of whether that child meets the definition of “dependent” under Sec. 152 of the Tax Code. This requirement is effective for plan years beginning on or after Sept. 23, 2010 (thus, for calendar year plans, starting with the plan year that begins Jan. 1, 2011). The favorable tax treatment addressed in Notice 2010-38 is effective as of March 30, 2010, and applies to covered nondependent adult children who do not turn age 27 during the employee’s tax year. Employers may rely on what an employee tells them as to the adult child’s date of birth.

What Notice 2010-38 does is to permit this favorable tax treatment to apply beginning March 30, 2010, to employees in plans that had already allowed coverage of nondependent adult children, but which were imputing income to employees to account for the coverage. It also permits the favorable tax treatment for plans that voluntarily expand coverage to nondependent adult children in advance of the date required by the Patient Protection Act.

The clarifications and guidance in IRS Notice 2010-38 include the following:

• An adult child who is employed elsewhere, and who is eligible for coverage through that employer but declines it, still may be covered on a tax-free basis under a parent’s plan, so long as he or she has not turned age 27 by the end of the year. (Note that the Patient Protection Act grandfathers plans in existence on March 23, 2010, so that these plans are not required to offer coverage to adult children who are eligible for coverage at their current employer. If a plan chooses to extend coverage to these individuals, the coverage is tax-free to the employee so long as the child has not turned 27 in the tax year.)
• An adult child who is married still may be covered on a tax-free basis under a parent’s plan, so long as he or she has not turned age 27 by the end of the year. If the adult child’s spouse also were covered, that coverage would not receive the favorable tax treatment, and the employer would be required to impute income to the employee reflecting the value of the spouse’s coverage.
• The exclusion applies to employee pre-tax contributions for health plan coverage under a cafeteria plan, as well as to health plan flexible spending account reimbursements and to employer-provided health reimbursement arrangements (HRAs). The notice states that the IRS will be amending cafeteria plan election change regulations retroactively to March 30 to allow changes for adult children under age 27 becoming newly eligible for coverage, or becoming eligible for coverage beyond the date the adult child otherwise would have lost it. Thus, a plan that chooses to allow employees to cover nondependent adult children in 2010 can permit employees to make election changes in order to do this on a pre-tax basis, or to make an FSA change to reflect the addition of the adult child. Employers that opt for this must amend plans by Dec. 31, 2010, to reflect this change.
• As noted above, for purposes of the tax exclusion, the adult child need not be a “dependent” of the employee. “Child” means an individual who is a son, daughter, stepson, stepdaughter, legally adopted individual, individual placed with the employee for adoption, or foster child.

Consult with our plan providers and benefits professionals to help determine the plan amendments and communications necessary to comply with the Patient Protection Act and to ensure employees receive the favorable tax treatment for coverage of nondependent adult children now provided by the Tax Code.

If your company currently sponsors a Flexible Spending Account (FSA) or a Health Savings Account (HSA) to allow employees to pay out-of-pocket medical expenses with pre-tax dollars, be prepared for upcoming changes. New health care reform legislation could make these “cafeteria plan” benefits less appealing to employees.
Under the new law, maximum annual FSA contributions are reduced, and there are new regulations affecting how the funds can be used. The intent of the new rules and penalties is to generate revenue which can be used to fund aspects of the health care reform package.

FSAs and HSAs (assuming the employee is covered under a qualified high deductible health plan) allow an employee to contribute tax-free funds that can used to pay for deductibles, drug co-pays, treatments that are not covered by Health insurance, and other qualified medical expenses.

Beginning on January 1, 2013, the annual limit for FSAs will be set at $2,500. Previously, the IRS had stipulated that employers could establish their own FSA contribution limit, and according to the Center on Budget and Policy Priorities, these limits generally fell into the $2,000 to $5,000 range. In 2009, Mercer’s National Survey of Employer-Sponsored Health Plans stated that the average yearly employee contribution was $1,424.

Annual limits for HSAs, however, were not affected by the new legislation.

Be aware that some restrictions will become effective more quickly. For example, as of January 1, 2011, FSA and HSA participants will no longer be able to spend the funds on over-the-counter medications unless a physician has prescribed them specifically. Also starting next year, non-qualified withdrawals from HSAs will be subject to a 20% penalty instead of the 10% penalty which is applied currently.

Starting January 2009, all Form 5500s are to be filed electronically using the Department of Labor’s newly implemented program, EFAST2. Here are some tips to remember to ensure that you fill this online form and file Form 5500 smoothly and without facing any hassle:

1. Before filing using EFAST2, responsible parties should register at their website. Here they would identify the individual who would be completing the Form 5500 and all signing parties. Early registration is recommended.
2. The five roles available upon registration are Filing Author, Filing Signer, Transmitter, Schedule Author, and Third Party Software Developer. It’s important that one understands their roles prior to registration as they cannot change them once the registration is complete.
3. The Filing Author is the individual who completes this online form at EFAST2, and those who sign the Form 5500 should register as the Filing Signer.
4. Each individual uses their personal credentials and these are not associated to the company. The process of registration assigns each user with a personal identification number and password.
5. Either the Filing Author or a third party administrator can complete the Form 5500 online. This third party administrator should be certified to prepare the form and submit it for the company.
6. According to the Internal Revenue Code, the plan sponsor, employer, or plan administrator is allowed to sign the filing. However instructions provided with Form 5500 states that forms that are not signed electronically by the plan administrator could be rejected and subjected to civil penalties under Title I of ERISA.
7. Social Security information should not be added, as filings entered under the EFAST2 program will be posted on the Department of Labor website. Also if your plan is regarded as a defined benefit plan, certain details from the Form 5500 should be posted on your company’s intranet for employee viewing.
8. For those filing extensions, a Form 5558 copy does not need to be attached to the Form 5500. Those who have already submitted a Form 5558 for the plan year would only need to check the right box on Line D. A hard copy of the Form 5558 must be maintained for the plan’s permanent record.
9. Schedule SSA and E have been eliminated from the Form 5500. One needs to file the annual registration statement directly with the Internal Revenue Service.
10. A hard copy of the Form 5500 must be kept with the permanent records of the plan, with all the necessary signatures.

These tips should help make the new e-filing process smoother for all to use. Remember to register early on the EFAST2 website, http://www.efast.dol.gov, before starting the application process to avoid unnecessary errors. And finally, be sure to read through the instructions and be aware of each person’s role in completing the Form 5500.

On a lighter note, it is funny to note that although this e-filing system was implemented to save paper, one still needs to maintain a paper hard copy.

The COBRA continuation of coverage law requires that certain notices be furnished to employees and other qualified beneficiaries by the employer or plan administrator. Because the penalties for noncompliance with the COBRA notice requirements can be costly, following the requirements for furnishing — that is, delivering — the necessary notices is an important part of COBRA administration.

COBRA notices that the employer or plan administrator must furnish include:

• The initial (or general) notice containing information about COBRA rights and responsibilities, which must be provided to the employee and spouse within 90 days of when the employee first becomes covered under the plan.
• The election notice, which must be provided to qualified beneficiaries within 14 days of the administrator being notified of a COBRA-qualifying event.
• The notice of unavailability of COBRA coverage, provided when the administrator receives notice of a qualifying event from an individual who is not eligible for continuation coverage.
• The notice of termination of COBRA coverage, required when COBRA coverage terminates before the maximum COBRA continuation period.

In providing COBRA notices, the employer or administrator should “use measures reasonably calculated to ensure actual receipt” by the employee, spouse, or other qualified beneficiary. COBRA regulations recognize that notices might be furnished through a number of different methods, including mailing, hand-delivery, and electronic transmission. According to these regulations, a notice is considered furnished as of the date of mailing, if mailed by first class mail, certified mail, or express mail; as of the date of electronic transmission, if the notice is transmitted electronically; or upon receipt by the individual to whom a notice is directed, if the notice is hand-delivered.

In the case of the initial COBRA notice, which must be provided to both the employee and covered spouse, the regulations specify that a single notice may be provided, addressed to both the employee and spouse if, on the basis of the most recent information available to the employer, the employee and spouse reside at the same address. There is no separate notice requirement for dependent children who live with the employee or spouse who receives the notice.

Though the regulations permit the initial notice requirement to be satisfied by including COBRA information in a summary plan description (SPD), since spouses also are entitled to this notice, plans that include the COBRA notice in an SPD and then hand-deliver the SPD to the employee at work will not be considered to have fulfilled the initial notice requirement concerning the spouse. Similarly, delivery of a required notice to an employee’s work e-mail would not meet the requirements when notice also is required for a spouse.

Though the regulations offer several options for delivery of COBRA notices to the required parties, in practice, many employers have opted for delivery by first class mail. First class mail has the advantage of being a reliable method for delivery of items and an accepted business practice. If an employee or other intended recipient raised an improper notice challenge, the employer or administrator would need to prove that it furnished the notice through an acceptable delivery method, not that the employee actually received the notice. Thus, establishing processes for mailing notices and keeping records that such processes were followed are important. For example, obtaining a certificate of mailing (which provides evidence that an item has been presented to the Postal Service for mailing) would establish that the notice was, in fact, mailed. Note that a certificate of mailing differs from certified mail with a return receipt. The latter provides evidence of actual receipt by the addressee, which is not required to show compliance with COBRA notice requirements.

Ensuring correct delivery of the necessary notices, and establishing procedures that show COBRA notices are being furnished as required by law, can help avoid costly compliance challenges.

In 2007, health care expenditures in the United States hit approximately $2.6 trillion, according to the Centers for Medicare and Medicaid Services. Estimates put the portion of this outlay that is attributable to health care fraud — payment for nonexistent, exaggerated, or ineligible services — at anywhere from 3% to 10%, according to the National Health Care Anti-Fraud Association (NHCAA). Health care fraud comes in many different shapes and sizes. Perpetrators include patients, providers, as well as individuals or groups with no connection to the health care system. Organizations such as the NHCAA emphasize that, although the vast majority of doctors, hospitals, therapists, etc., are honest and submit valid billings, most cases of health care fraud do originate with providers. The types of health care fraud seen from providers include:

• Billing for services that were never actually provided to the patient.
• Falsifying a diagnosis.
• Upcoding, or billing for a more expensive service, treatment, or procedure than the one that was actually performed.
• Recoding, or billing for a different treatment or procedure than the one actually provided (for example, the service actually provided is a nose job, which is considered a cosmetic procedure and not covered under the plan; but the provider codes it as a repair to the septum, which would be covered).
• Performing unnecessary tests and/or procedures (e.g., diagnostic tests).
• Unbundling services that are part of one procedure and billing for each separately.
• Billing for the entire cost of a service when partial payment (such as a copayment) has been collected from the patient.

Patients commit health care fraud by listing and filing claims for ineligible dependents; sharing health plan identification cards; filing claims for services they never received; altering or forging bills and receipts; and buying and re-selling prescription medications. Health care fraud can also be perpetrated by individuals or groups posing as providers who, using stolen or purchased patient insurance information and provider billing numbers, submit bills for services from a fictional clinic. Or, they might pose as providers in order to obtain other individuals’ legitimate health insurance information, and then use the information for themselves, or even sell it.

Although health care fraud adds to costs, it also carries a price tag that is not financial. Patients undergoing unnecessary procedures, testing, or drug therapies face risks to their health. Phony or inflated diagnoses result in inaccurate patient medical records, which can complicate later treatment. Amounts paid on fraudulent claims might result in an insured reaching a dollar-amount or number-of-visits maximum under a policy when seeking coverage for later, legitimate claims.

Industry groups, insurance companies, and state and federal governments have become increasingly proactive in their efforts to prevent, detect, and punish instances of health care fraud. The Health Insurance Portability and Accountability Act (HIPAA) established health care fraud as a federal criminal offense. HIPAA provides for financial penalties as well as imprisonment for up to 10 years for health care fraud convictions, with longer sentences if the fraud results in patient injury or death. Many state insurance departments require anti-fraud efforts by the insurers or HMOs that operate in their states. Insurers and HMOs staff dedicated investigative units that use computer technology, patient education, and solid communications with other insurers and law enforcement to battle health care fraud. The NHCAA offers a professional certification — the Accredited Health Care Fraud Investigator — to those that complete a training course.

It is in the best interest of every business and individual to do what it can to prevent health care fraud. Not only does fraud contribute to the overall rate of health care cost increases, it affects your rates at renewal. Talk one of our health insurance professionals about anti-fraud efforts, and help your employees become attuned to what they can do to avoid becoming an unwitting participant in a health care fraud scheme (e.g., safeguarding their health insurance ID cards and insurance information; being wary of offers for “free”� services; examining explanation of benefits (EOB) statements for accuracy). These efforts, at a grassroots level, do make a difference.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act. Along with the Health Care and Education Reconciliation Act of 2010, this legislation will make significant changes to our current health care system.

The Act adds new responsibilities for employers and insurance carriers. Although most of the provisions will start in 2014 or later, some provisions are effective right away or within a short period of time after enactment.

Effective 2010

• Small-Business Tax Credit. A tax credit of up to 35% of the employer’s health care contribution is available for qualified small employers (any employer with no more than 25 full-time employees and average wages of less than $50,000). This tax credit will increase to 50% starting in 2014 once exchanges are operational.
• Early Retirees. A temporary reinsurance program is provided to employers that offer coverage to early retirees between the ages of 55 and 64.
• Health Plan Changes. 1) Plans must offer unlimited lifetime benefits and annual benefit limits will be restricted. 2) Pre-ex conditions will be prohibited for children under 19. 3) Recissions are prohibited except in the case of fraud. 4) Plans must cover certain preventive health services at no cost to the insured. 5) Dependent coverage age limit extended to 26.
• Federal High Risk Pool. Temporary establishment of a high risk Health insurance pool for individuals unable to find insurance elsewhere.

Effective 2011

• W-2 Reporting. Employers must report value of health care benefits provided on employee w-2s, but not as taxable income.
• Higher Penalty Tax on Non-Qualified Health Savings Account (HSA) Withdrawals. Non-qualified withdrawals will be taxed at 20% versus the current 10% penalty.
• Cafeteria Plans. A new Simple Cafeteria Plan is created through which small employers (fewer than 100 employees) can easily provide tax-free benefits to their employees without the administrative burden of sponsoring a cafeteria plan.
• Standardized Definition of Qualified Medical Expenses. Costs for over-the-counter medications obtained without a prescription will no longer be considered a qualified medical expense.

Effective 2013

• Flexible Spending Account Limits. Annual contribution limits are reduced to $2,500 per year, with CPI increases available in future years.
• Itemized Deduction for Medical Expenses. The Act increases the income threshold for claiming the itemized deduction for medical expenses from 7.5% to 10%. Individuals over age 65 would be able to claim the itemized deduction for medical expenses at 7.5% of adjusted gross income through 2016.
• Higher Payroll Taxes for High Income Earners. The hospital insurance tax rate will be increased 0.9 percentage points for wages over $200,000 for individuals and $250,000 for those filing jointly.

Effective 2014

• Employer Coverage Mandates. Employers with 50 or more employees who do not offer employee health coverage will pay $2,000 annually for each full-time employee, excluding the first 30 full-time employees. The penalty is increased to $3,000 for any full-time employee receiving a federal tax credit for coverage, because his or her employer health coverage is considered “unaffordable.” Coverage is considered “unaffordable” where the employee contributes more than 9.8% of his or her income, or the employer contributes less than 60% of the actuarial value of the plan.
• Insurance Exchanges. Exchanges are created at the state level starting in 2014, where individuals and small employers can shop for health coverage. Initially, the exchanges would be available to individuals and small groups (less than 100 employees), unless the state opts to cover only groups with up to 50 employees. Starting in 2017, states could open the exchanges to larger groups.
• Wellness Programs. Employers can offer larger rewards, up to 30% of the cost of coverage, to employees for participation in a wellness program or for meeting certain health-related goals.
• Individual Tax Credits. Credits are available for people with incomes up to 400% of the poverty level for insurance purchased through an exchange.
• Health Plan Changes. 1) Insurers cannot refuse to issue coverage on any individual due to pre-existing conditions. 2) Higher rates cannot be charged to any individual based on health status, gender or other demographic factors. 3) Coverage cannot be non-renewed or dropped because an individual participates in a clinical trial.

Effective 2018

• High Value Plan Excise Tax. A nondeductible excise tax of 40% is imposed on any health insurance plan with combined annual employer/employee premiums exceeding $10,200 for individual coverage and $27,500 for family coverage. The tax would only apply to premiums in excess of the threshold.

More than half (58%) of employers that offer health benefits also offer wellness programs, according to Kaiser Family Foundation’s 2009 Employer Health Benefits Survey. Many of these say their primary reason for doing so is to help improve employees’ health, reduce absenteeism, and lower health care costs. These goals, if achieved, can represent significant cost savings for a company — but this can happen only if employees participate. Frequently, participation in wellness initiatives falls short of expectations. Creative and consistent marketing, together with a careful use of incentives, can positively impact wellness program participation and help these programs bring cost-savings results.

Wellness initiatives run the gamut from simple workplace walking clubs to onsite fitness centers. The most common include health risk assessments; screenings for high blood pressure, cholesterol and diabetes; exercise incentives, such as discounts to local gyms; weight management and nutrition programs; smoking cessation programs; and disease management programs. According to a survey from Health2 Resources, a health care and e-health public relations and communications firm, 73% of employers measured the return on investment from their wellness programs, and 83% of these employers saw a return of better than dollar for dollar on their investment.

With such a return on investment being possible, increasing employee participation in wellness programs becomes a priority. Here are some ideas to engage employees in wellness initiatives:

Offer the types of programs in which your employees would be interested. A key element of successful marketing is to offer consumers the products they want. Bring this perspective to your wellness initiatives, and survey employees or talk with them informally about various wellness activities that your company would be willing to bring into the workplace, to see where employee interest lies.

Build interest in the program by using a variety of media, beginning several weeks before the program launch date. Remember that individuals learn in many different ways, so employ all means of communication at your disposal: articles in the company newsletter; paycheck stuffers; lunchroom posters and table toppers; e-mails; a letter from top management; employee meetings; DVDs/videos with program highlights; presentations by the wellness program vendor. Furthermore, build excitement for a program launch by dispensing communications strategically and structuring them in a way that enables employees to personalize the experience.

Make it as easy as possible for employees to participate. For example, if your company’s wellness initiatives include onsite screenings, make it easy to sign up for them, schedule them throughout the day, and let employees know they are permitted to take a work break to have the screening done. To encourage spouse participation, include early morning and evening times. If your company’s wellness initiatives include a health risk assessment, offer paper and electronic ways of completing it, and keep it as short and simple as possible.

Make participation fun. Incorporate contests, party-atmosphere health fairs, and club/team based activities that get employees moving (like lunchtime walking clubs, or a softball or bowling team).

Since some employees hesitate to provide health information through a wellness initiative, suspecting that the employer will be privy to it, take steps to overcome this barrier. Clearly communicate the company’s confidentiality policy and the confidentiality guaranteed by HIPAA, as well as the steps taken to ensure that participant confidentiality indeed is maintained.

Offer financial incentives, which are thought by many to be the most effective motivator toward wellness program participation. Common financial incentives include a health plan discount or premium differential, contributions to a health savings account, cash or payroll credits, or copay reductions. The Health2 Resources survey found that two-thirds of surveyed firms that offered wellness programs used incentives to motivate participation. The value of incentives in 2009 averaged $329 and ranged from $1 per pound of weight lost to annual premium reductions valued at more than $1,500.

Most important of all, make sure employees know the value of improving their health, both in terms of disease prevention/longevity and dollars and cents. On some basic level everyone knows it is better to be healthy than not, but drive this point home with accurate data on, for example, the impact being overweight has on all aspects of a person’s health, and how this can translate to an individual’s personal health care spending. The bottom line of well-used wellness programs is significant potential savings for both the employer and program participants.