Employment Resources

End-of-year benefits enrollment demands huge amounts of time and energy from a company. Because a quality benefits package is critical to a company’s ability to compete for talent, it can be devastating, come enrollment time, to realize that the benefits being offered are met with less than an enthusiastic response from employees. Why not work to avoid this result by closely examining the “fit” of your current benefits package and taking steps well in advance of open enrollment to prepare for benefits renewal?

Sometimes it will be very clear that your benefits package is in need of an overhaul; other times the hints are more subtle. Any of these occurrences can signal that it’s time to make changes to your benefits offerings:

• Changes in workforce demographics. A shift in your employee population can call for changes to the benefits you offer. Sometimes merely the passage of time triggers this: for example, yesterday’s college grad new hires are today’s parents, interested in flex time schedules, day care accounts and supplemental life insurance options.
• A significant change in the number of employees. If your company has acquired a competitor, or opened up a new location, your larger workforce can mean that you might qualify for better pricing on some of your benefits options.
• Grumbling by employees, or poor enrollment numbers. You might hear through the employee grapevine that your workers are dissatisfied with their benefits choices, or this sentiment could make itself known through enrollment results. Either way, you need to find out why, or your investment in employee benefits isn’t being put to the best use.
• Your benefits costs rise annually, and you aren’t sure you’re getting the best value for your money. If your company is in any of the above situations — or if you just have a gut feeling that the investment you’re making in benefits isn’t delivering the desired results — now is the time to take action, well in advance of the open enrollment/benefits renewal period.
• Determine what benefits employees want by conducting employee surveys and focus groups. Chances are you can’t satisfy every employee whim, but you’ll build goodwill through this communication process, and will be better able to craft a benefits package that’s on target with your workforce’s needs.
• Benchmark your benefits offerings against those of your competitors. The benefits you offer should help attract new employees and engender loyalty among those already on your payroll. It’s hard to achieve these goals if your competition offers a selection of well-priced, diverse benefits and your company does not.
• Benchmark your benefits costs. Your benefits advisor should be able to supply data that will give you a sense of whether what your company pays for medical, dental, etc. is in the ballpark of competitively priced benefits. If you find that your costs are too high — or if you simply want to see whether you can do better — it’s time to begin the Request for Proposal process.
• Consider adding benefits you have not offered before. This doesn’t have to be a costly proposition. You can bring in supplemental benefits on an employee-pay-all basis, or add pre-tax flexible spending accounts for health care and/or dependent day care. Surveys show that employees appreciate when employers make these types of benefits available to them, even if the employer isn’t contributing to the cost.

In addition to examining the content of your benefits program, a midyear review of “how” your company conducts open enrollment can help to make this process run more smoothly in future years. Consider your communications; how you can help employees make the best enrollment decisions; and whether you are using enrollment technologies and outside resources as efficiently and cost-effectively as possible. All the planning you do now will make for a smoother enrollment experience, both for your company and for your employees.

Comprehensive wellness programs not only improve employees’ health — they also can slow the rate of an employer’s health care cost increases. This results in a positive return on an employer’s investment in the wellness initiative. According to a study published in the Journal of Occupational and Environmental Medicine, employers can save $1.65 in health care costs for every dollar spent on a comprehensive employee wellness program.

The study followed participants in a wellness program sponsored by health insurance provider Highmark for its own employees. The wellness initiative was launched in 2002 and offered the following free of charge to employees (some program components were not included initially but were added in later years): Health risk assessments; online, onsite and/or individual programs on nutrition, weight and stress management, and tobacco cessation; screenings for cholesterol, blood sugar and blood pressure levels; campaigns to increase fitness awareness; disease management initiatives; and (at some locations) onsite fitness centers. Wellness program expenses averaged $139 per employee per year.

In order to assess the impact of the wellness program, participants were matched to nonparticipants based on gender, age, 2001 medical expenses, claims-based evidence of heart disease and diabetes, and certain predictive morbidity scores. For both participants and nonparticipants, individuals with $100,000 or more in annual health care costs were excluded.

Health care expenditures grew more slowly 2001 through 2005 for wellness program participants than for nonparticipants. Specifically, estimates of health care expenses per person per year were $176 lower for participants, and inpatient expenses were $182 lower. Over the four-year period, during which the wellness program cost Highmark just over $808,000, more than an estimated $1.3 million in health care cost savings were gained. This translates to a return on investment of $1.65 for every dollar the employer spent on the wellness initiatives.

The study also examined whether the wellness program participants made greater use of preventive services available through the health plan. In comparing data from the year before the wellness program launched and the next year, preventive visit screening rates increased from 56% to 60% for employees who completed a health risk assessment (HRA), from 57% to 60% for employees who completed an HRA and also participated in an online, group or individual wellness program component, and from 62% to 64% for employees who took an HRA and also used a fitness center. For nonparticipants, use of health plan preventive services remained unchanged at 55% during the comparison years. As a further measure of the impact of the wellness program on use of health plan preventive services, the study found that preventive care visits accounted for 16.5% of total health plan expenditures for wellness program participants, compared with 13.5% for nonparticipants.

Because the analysis only considered health care cost savings, the authors note that, “This savings estimate is most likely an underestimate of benefit as it does not include savings realized from improved productivity or reduced absenteeism or presenteeism.” They go on to cite other studies that found wellness program participants were absent a third- to a half-day less in the year following participation in a wellness program, and that wellness program participants have higher morale, productivity, job satisfaction and overall health and fitness levels than nonparticipants.

Though the Highmark initiative might be more comprehensive than many employers are willing or able to do, the study does show that wellness programs return the investment employers make in them, in financially measurable ways and in intangibles like a happier, more committed and productive workforce.

As an employer, you spend a significant amount of money providing your employees with an attractive benefits package. It is a necessity if you’re in a competitive industry where you need to find and retain top talent. But do your employees appreciate your investment? Do they have any idea how much you spend to provide their benefits package?

If your workplace is like most, the answer is probably no. Surveys on employee attitudes toward their benefits reveal that most vastly underestimate the amount their employers spend. Studies also show that employee attitudes toward their benefits packages tend to be negative, focusing on focusing on rising premiums and cost-sharing methods rather than employer contributions.

TELLING YOUR STORY

Generally, it’s not that employees are ungrateful; it’s that they truly don’t realize how much you pay to provide benefits. How can you tell your story so that employees appreciate their benefits? There are a number of ways to accomplish this, and it’s a worthwhile undertaking since you need a return on your considerable investment. Here are low or no-cost tips that may help:

• Provide a total pay statement: When employees think about their compensation, they typically only consider their gross pay. However, as you know, benefits make up a large part of the full amount you pay to keep them on board. You can spell out the details in a total pay statement, which is typically a chart illustrating the value of the total compensation and breaking it down into its various parts. You can include other employee perks you offer, such as tuition reimbursement, licensure fees you pay, etc. There are companies that provide custom total pay statements, or you can use a spreadsheet application to generate them yourself.
• Make costs a part of benefits education: Many businesses provide educational meetings about employee benefits during new-hire orientation or annual benefits enrollment. This is a perfect opportunity to emphasize the value of the benefits package and to underscore the fact that it is part of the employees’ total compensation. If your insurance carrier conducts employee training on benefits, you can ask your representative about the possibility of mentioning the total cost and the employer portion.
• Add free or low-cost perks: You might also consider adding voluntary benefits or perks such as pet insurance, discounts on gym memberships, community service days or other incentives to help employees see the overall value of their relationship with your company. Sometimes employees focus on quantity, so having additional choices — even ones that are 100% employee paid — can result in a greater level of appreciation. Your insurance broker may have suggestions if you’re ready to explore this option.

A TOKEN OF APPRECIATION

If your employees don’t appreciate their total compensation, you can’t fully capitalize on your investment in benefits as the important motivational tool it can be. It pays to take a second look at how your employees perceive their benefits. Remember, improving their perception can be relatively inexpensive — and well worth the effort.

During the past 20-plus years, the Internal Revenue Service (IRS) has issued, in dribs and drabs, regulations, notices and other guidance on Sec. 125 cafeteria plans. In proposed regulations effective in general for 2009 plan years, the IRS now has consolidated its cafeteria plan guidance, along with clarifying and elaborating on various cafeteria plan issues. The regulations are lengthy — 124 pages — so in this article we highlight some of the points that are most significant for employers that offer some type of cafeteria plan.

Keep in mind that the term “cafeteria plan” can encompass arrangements as simple as premium-only plans or flexible spending accounts (FSAs), those as elaborate as choice-making plans with employer credits and a wide selection of benefits, or something in between. These requirements for cafeteria plans apply to any of these types of arrangements.

The cafeteria plan must be in writing, and the plan must be operated in accordance with the written plan terms. The regulations specify all that must be included in the written plan document. Remember that the requirement that the plan be in writing applies to all types of cafeteria plans, even premium-only plans.

All participants in a cafeteria plan must be employees, which the regulations define to include common-law employees, leased employees and full-time insurance salespeople. Former employees, including laid-off employees and retirees, may participate, but the plan cannot be maintained predominantly for them. Spouses and dependents may receive benefits under the cafeteria plan, but cannot “participate” in the plan. Self-employed individuals, including sole proprietors, partners, directors and 2% shareholders in Subchapter S corporations, are not considered employees and thus may not participate in a cafeteria plan, but they could sponsor a plan for employees.

The regulations specify the kinds of benefits that can be included in a cafeteria plan. Of note:

• If Group-Term Life insurance is offered, employers must use Table I as the exclusive method of computing the cost of such coverage in excess of $50,000 (which is includible in an employee’s income). This provision is effective immediately.
• Individual Health insurance premiums, as well as an employee’s or former employee’s COBRA premiums, can be paid through a cafeteria plan (but not through an FSA).
• Among benefits defined as nonqualified (and a plan that offers nonqualified benefits is not considered a cafeteria plan) are contributions to Archer medical savings accounts, contributions to health reimbursement arrangements, Group Term Life insurance for spouses or dependent children, and elective deferrals to Sec. 403(b) plans.
• A change in plan year, or a short plan year (less than 12 months), is only permitted for a valid business purpose.
• Though a cafeteria plan may not provide for deferred compensation, the regulations specify certain types of plan features that are not considered deferred compensation, such as a Long-Term Disability policy paying benefits for more than one year, certain two-year lock-in vision and dental policies, and certain advance payments for orthodontia.
• Though cafeteria plan elections generally are irrevocable (other than for changes in status or life events), the regulations permit employees to prospectively elect, revoke or change salary reduction elections for HSA contributions at any time during the plan year with respect to salary that has not become currently available at the time of the election. The regulations also permit automatic default elections for employees who fail to actively elect, and they permit new employees to make elections within 30 days of hire that are retroactive to the date of hire.
• Health FSAs may be established for limited purposes, such as an HSA-compatible limited-purpose health FSA or a post-deductible health FSA. Also, an employer can limit FSA enrollment to employees who participate in the health plan. A dependent care FSA may allow terminated employees to spend down their account through the end of the plan year. Employers can retain FSA forfeitures, use them to defray administrative expenses, or allocate them to participants.
• The regulations provide guidance on cafeteria plan nondiscrimination tests, define several key terms (including highly compensated individual, 5% shareholder, key employee and compensation), and specify that nondiscrimination testing must be performed on the last day of the plan year. They also create a nondiscrimination testing safe harbor for premium-only plans.

With this consolidated package of guidance for cafeteria plans, the IRS is likely to take enforcement more seriously. Now would be a good time to go through your cafeteria plan written document and administrative procedure and check for any compliance issues. Call us. We can help.

Under COBRA (Consolidated Omnibus Budget Reconciliation Act), the federal government requires employers to offer temporary continuation of health benefits to certain employees who suddenly lose their jobs.

The law says that employers who fit a certain profile must offer COBRA to employees who undergo a “qualifying event.” This event is typically the termination of employment, whether voluntary or involuntary. It could also be a reduction in work hours, resulting in the loss of the employee’s health benefits. However, if an employee loses their job due to some type of gross conduct, the employer may not have to provide COBRA benefits.

Unfortunately, like many federal employment laws, COBRA can be confusing to interpret and understand. It can be quite a challenge to figure out whether or not your company is required to comply with this law. However, it’s critical that you first determine if COBRA applies to your business. Otherwise, you may end up facing expensive excise taxes, government investigations, fines or even litigation brought forth by former employees.

Here are the factors that determine if an employer is subject to COBRA:

Company size

According to the Department of Labor, employers with 20 or more employees are generally subject to COBRA. However, the law does not cover the District of Columbia, federal employees, particular church-related programs and some companies with less than 20 employees. If you fall into this group, you are required to give detailed notice to employees about their COBRA rights.

Small employer exception

Although many smaller businesses do not have to comply with COBRA, there are some exceptions. Under the law, if an employer “normally” employed 20 or more employees in the previous calendar year, they must offer employees COBRA benefits.

In other words, if your business employed more than 20 employees on half or more of the company’s typical business days the previous year, you are required to comply with COBRA. You have the option to figure the number of people you employed either on a daily basis or a pay-period basis. You must count all employees, regardless of whether they were enrolled in the group health plan.

Under COBRA, both full-time and part-time employees count toward the total number. However, a part-time employee does not count as a “whole” employee. Instead, they count as a fraction of an employee depending on how many hours they work as compared to a full-time employee.

For example, let’s assume your company requires that an employee must work 30 hours per week to be considered a full-time worker. In that case, an individual who works 15 hours a week would be considered half of an employee, someone who works 10 hours a week would count as a third of an employee, and so on. However, no business can require that employees work more than 40 hours a week to be considered full-time.

Self-employed workers, independent contractors and corporate directors do not count, even if they receive health benefits from the company. But here’s where it gets confusing: even though these workers do not count as an employee for the purpose of small business exceptions, they may still be eligible to receive COBRA benefits due to a “qualifying event.”

Multi-employer plans

In a multi-employer health plan, each participating employer must determine independently whether or not they are subject to COBRA laws. For example, if a multi-employer plan that is not required to follow COBRA suddenly adds an employer that does fall under the law, the entire plan is then subject to COBRA.

Additionally, business mergers and spin-offs can impact COBRA requirements. If you are uncertain about whether your company is subject to COBRA, you should consider meeting with an attorney.

According to pharmacy benefit manager Express Scripts, increased usage of generic drugs helped slow growth in prescription drug costs for 2007, resulting in an estimated $5.2 billion in savings for benefit plan sponsors and their employees. In 2007, total spending on prescription drugs grew 4.7%, the slowest rate-of-growth ever reported by the company.

Data shows that average prescription costs increased just $1.09 to $54.34 in 2007, up from $53.25 in 2006. Factors contributing to higher costs included a 2.5% increase in overall utilization and 7.4% increase in average brand name drug prices, while average generic drug prices decreased 3.1%. Without the so called “generic effect,” the cost per prescription would have increased $3.58 to $56.83.

Generic purchasing power wielded its biggest impact on cholesterol drugs, the nation’s most-prescribed drug category. Both Pravachol(R) and Zocor(R) went generic in 2006, causing a significant shift in generic utilization of these drugs. Costs for cholesterol drugs overall fell 15.5% in 2007, averaging $67.32 per prescription versus $79.48 in 2006. Express Scripts reported that 48.9% of all prescriptions in 2007 for a cholesterol drug were for a generic, while 63.7% of all prescriptions filled were for a generic.

On a per-member-per-year basis, spending in 2007 increased from $762.76 to $798.76, including both plan costs and member co-payments. Had generic utilization remained constant, spending would have been $32.53 higher for each of the nation’s 158.5 million commercially insured employees.

To determine drug trend, Express Scripts includes both member co-payments and plan sponsor costs to calculate total cost. The company also accounts for changes in utilization, the relative rates at which brands and generics are used, price inflation, units per prescription and changes in the mix of chemical entities and dosage forms used.

Research such as this clearly shows the cost savings potential that generic drugs can offer to an employer’s health plan. Co-payment differentials that make generics significantly more cost-effective for employees and communications that educate employees on generics’ safety, effectiveness and affordability can lead to increased generic usage and, ultimately, help in moderating health plan costs.

In days past, open enrollment could be a relatively straightforward experience, both for employers and employees. Benefits choices were few, requiring simple communications and little decision-making. With the era of one-size-fits-all benefits packages almost a thing of the past, however, open enrollment has become a big deal. Employers devote considerable time and resources in selecting an array of benefits to offer to employees, along with the vendors to provide them. Employees need to figure out which of the benefits to choose, considering both what they think they need, and the cost.

According to a survey from MetLife, employees are looking for more help during open enrollment to pick the benefits that are right for them. Specifically, 59% would like their employer to suggest benefits that would be appropriate for someone in their “life stage” — single, married without kids, new family, established family, or nearing retirement. Other than a spouse, employees said they were most likely to view someone in their same life stage as the most important source of advice (22%), rather than HR (14%) or a professional advisor (11%).

Young singles were most interested in guidance, with 78% of those seeking HR advice saying they would like their employer to suggest life-stage guidelines to help them in benefits selection. According to life-stage guidance from MetLife for this group, having the money to survive an income loss should be a pivotal concern.

For dual income/no kids employees (DINKs), both disability and life insurance are key benefits, since the couple has become accustomed to relying on two incomes. Employees in this group also may be seeking a tax break, which pretax 401(k) plan contributions can provide.

Employees with new families should do a complete and careful review of their benefits during open enrollment, since the addition of dependents would have required a change in coverage categories, and also brought on the need for types of benefits that previously may not have seemed important, such as life insurance and dependent care.

Established families might be in the habit of knowing what benefits they need, but as family members get older future financial concerns loom closer on the horizon. Employees in this life stage should check to make sure that they’re on track for saving for expenses such as college education for the kids, long-term care and retirement, using any tax-favored vehicles or insurance products available to them through their employers.

For many employees in the pre-retirement life stage, it’s catch-up time. More than half (56%) of pre-retirees in the MetLife survey said they were somewhat or significantly behind where they wanted to be with their retirement savings. With dependents’ financial needs lessening, many pre-retirees are able to make larger 401(k) plan contributions. Though employees aren’t limited to open enrollment for making 401(k) plan changes, with the benefits-examination atmosphere that open enrollment inspires, it’s a good time to remind employees to review where their accounts stand. Also, pre-retirees who haven’t considered long-term care insurance might want to give it a serious look.

The MetLife survey also offered these observations:

• Of the surveyed employees who wanted their employer to suggest the right benefits based on their life stage, 84% said they would be willing to share personal information — such as their age, marital status, number of children and income — that would allow the company’s benefits insurer or provider to offer customized advice on benefits selection.
• Only 51% of the surveyed employees said they had actually read the entire open enrollment package.
• Employees tended to hold their employer responsible for a bad open enrollment experience — 58% of those who felt negative or not confident about their enrollment decisions blamed their employer for this feeling.

This survey data provides food for thought on how to make the most out of open enrollment. Although open enrollment isn’t your only time to communicate with employees, it certainly is one of the most significant. Building employee goodwill by providing tools to help them make the best benefits choices can pay off in greater employee satisfaction throughout the year.

With health plan costs a huge, and growing, part of companies’ compensation expense, employers increasing are looking at the impact that employees’ lifestyles and health habits have on health care spending — and considering doing something about it. Employees who smoke, are overweight, don’t exercise or have a chronic untreated health condition simply are likely to cost more — they’re apt to have higher health plan expenses, if not now then down the road, and also are at greater risk for more frequent absences and lower productivity. Consequently, employers have started to use an array of pocketbook-oriented “carrots” or “sticks” to motivate employees to get these health issues under control.

Basically, the message these employers are sending to employees is this: Lead a healthy lifestyle, and we’ll ask you to contribute less to your health plan premium. Continue with habits that are shown to lead to medical problems, and we’ll ask you to pay more.

“Carrots” loosely translate to incentives or rewards, while “sticks” take the form or surcharges or penalties:

• Employees who smoke pay higher premiums for health care coverage. If they participate in a smoking cessation program, they don’t have to pay the surcharge.
• Employees who register a body mass index (BMI) reading in the normal range receive a credit to apply to their health care premium. Those with a BMI outside of normal range pay a higher premium, but they can receive a credit to offset the increase by participating in nutrition counseling.
• Employees who “pass” each in a series of health screenings (blood pressure, cholesterol, blood sugar, etc.) receive a discount on their health plan premium contribution for each screening passed.
• Employees with a chronic condition such as asthma, diabetes or hypertension receive a cash incentive for participating in a disease management program.

What are the considerations in implementing any of these approaches? First, there are the potential legal issues. Guidance from the Department of Labor allows wellness programs that offer rewards, and considers them to not discriminate under the Health Insurance Portability and Accountability Act (HIPAA) based on health status, so long as certain requirements are met. In part, these requirements mandate that any reward provided must not exceed 20% of the cost of plan coverage, and the plan must offer a reasonable alternative for attaining the reward to people who, for reasons beyond their control, cannot meet the established health standards. Another discrimination issue could arise under the Americans With Disabilities Act (ADA), which in part limits medical inquiries of employees regarding any disability, unless job-related and for a business necessity.

Since the use of rewards and surcharges is a relatively new development, there is not much case law or legal precedent that employers can use to guide their design of these programs. In deciding how far to go in penalizing employees who pose a higher risk of incurring extensive health care costs, then, the second factor to consider is your company’s philosophy toward “pushing the envelope” when it comes to this type of issue. After consulting with legal counsel, would you feel comfortable in implementing a type of program that few companies, to date, have tried? Although an increasing number of employers are offering incentives for voluntary employee participation in health risk assessments or other programs that can enhance health, fewer have imposed outright penalties for lifestyle-related behaviors or failure to meet health standards such as BMI, cholesterol level, etc.

Next, look at your most recent health care cost and claims data, and at your employee population overall. You might be able to identify certain areas for which a voluntary wellness program could have an impact, and this could be a step to try before turning to penalties, which employees tend to perceive more negatively than incentives. Finally, assess how employees are likely to react to being penalized — or to seeing their co-workers penalized — for health-related factors, and how implementing a cutting-edge program could affect your recruitment and retention efforts. Our benefits specialists are here to help — please contact us for more information.

Ever-rising health care costs can have a severe, negative impact on a company’s bottom line, and on employees’ pocketbooks. If you could find a simple and straightforward way for both your company and your employees to save a few dollars on the cost of health care — without changing carriers or plan design — chances are you’d want to learn more about it. That’s exactly what Sec. 125 premium only plans (POPs) offer: a way for both a business and its employees to spend less on health care without giving up any of their current benefits or coverage.

A POP is a version of a Sec. 125 cafeteria plan. It allows employees to reduce their salary to pay for health care premiums with dollars that are not subject to taxes (federal income, FICA and, in most cases, state and any local income taxes). In doing this, a POP enables employees to get more mileage from the dollars they use to pay for their health care benefits. Because any pre-tax dollars are not subject to FICA taxes, an employer also realizes savings because it does not pay its share of this tax on any premiums run through a POP.

Let’s look at exactly what these savings can amount to, both for an employer and its employees. Suppose an employee’s monthly contribution for employee-only coverage under the company health plan is $200. If this employee is in the 20% tax bracket and lives in a state with a 3% income tax, along with the 7.65% FICA tax the POP results in 30.65% tax savings on the $2,400 annual contribution, or $735.60 in annual savings. An employee in the same tax situation whose contribution for family coverage is $300 monthly will save $1,103.40 annually. If these employees’ company had 10 employees with employee-only coverage and 20 employees with family coverage, for a total annual employee pre-tax contribution of $96,000, the employer would save its 7.65% FICA contribution on this amount, reducing its cost by $7,344.

Though a POP is a very simple version of a Sec. 125 plan, it is subject to the compliance rules for cafeteria plans. This includes, in part, the requirement for a written plan document and nondiscrimination testing. Regulations for Sec. 125 plans provide a simplified safe harbor nondiscrimination test for POPs, which basically deems a plan as nondiscriminatory based on eligibility to participate. Under this safe harbor, if all employees are offered the opportunity to elect to salary reduce the same amount or same percentage of the premium for employee-only or family coverage, the plan will not be considered discriminatory, even if a disproportionate percentage of highly compensated or key employees actually elect salary reduction.

Any employer can implement a POP, though certain individuals are not considered “employees” under the Sec. 125 rules and could not participate in the plan. These include self-employed individuals, partners, and more-than-2% shareholders of a Subchapter S corporation.

In addition to Health insurance, POPs also could be used to pay for Dental, Vision, any Supplemental Medical, and Group Term Life insurance that does not exceed $50,000 in face value. Long-Term Disability (LTD) insurance premiums can also be paid for with pre-tax dollars, but if they are, any disability benefits that are paid will be considered taxable income to the employee. For this reason, many employers choose to keep LTD on an after-tax basis, even if they run other types of premiums through a POP.

Plan documents and administrative services are readily available to quickly put in a POP. If your employees currently pay their health plan premiums with taxed dollars, we can help you look into the potential savings that a POP could bring to them — and to your benefits budget. Call us.

When employees make decisions about their daily activities and are presented with challenging tasks they enjoy, they are likely to experience better health. This conclusion is drawn from a study titled Creative Work and Health conducted by a research team at the Population Research Center at The University of Texas, and published in the December 2007 issue of the Journal of Health and Social Behavior.

The study’s lead author John Mirowsky, a sociology professor at the Population Research Center, defined creative tasks as non-routine, enjoyable and allowing the doer to learn new things and solve problems. He added that people involved in this kind of work, regardless of whether or not they receive a salary, feel healthier and experience fewer physical problems.

The researchers also discovered that employed people are generally healthier then the unemployed. This is true even if they don’t exercise complete control over their daily activities and aren’t necessarily involved in creative activity. The study further revealed that the daily activities of employed persons are more creative than those of unemployed persons of the same sex, age, and level of education.

After reviewing the data, researchers concluded that there were some important health advantages in having challenging work. Being involved in work that is considered somewhat above average in creativity, as opposed to being involved in work that is somewhat below average, is equal to being 6.7 years younger. It is also equal to having two additional years of education or 15 times more household income.

When examining various job categories, the researchers found that jobs that offer a high status within an organization, provide the incumbent managerial authority, or that require complex work with data, generally involve more creative tasks. Conversely, jobs that are further down on the organizational chart, and have little or no managerial authority are considered less creative. The example the researchers used of a job fitting this description is that of an assembly line worker.

However, even if someone works in an uncreative job, they can still find creative ways to approach their assigned tasks. The study uncovered the fact that people in a variety of jobs found ways to make their work more creative. It was also noted that people with higher levels of education enjoyed more creative activities in their lives, including both paid and volunteer.