Employers provide incentives for more healthful lifestyles
By Andrew Weiland, of SBT
Some people let their exercise equipment gather dust in the basement and avoid working out, but many We Energies employees do not.
The company’s corporate headquarters at 231 W. Michigan St. in downtown Milwaukee has an exercise room equipped with weights, treadmills and other exercise machines.
"It’s actually a very busy place during the lunchtime and right after work," said We Energies spokeswoman Margaret Stanfield.
We Energies also provides exercise equipment at many of its power plants and service centers. Employees can use the equipment at no charge. For a $25 fee, they also can take an eight-week exercise class at the company.
In addition, the company allows employees to reduce the deductions from their paychecks for health insurance costs by up to $300 per year to take a health assessment, exercise, eat right or visit their doctor.
"Health care costs are rising, and we believe encouraging our employees to live a healthy lifestyle brings down the company (health care) cost," Stanfield said. "You also have happier, healthier employees."
We Energies saved about $1.50 for every dollar spent on employee wellness in 2001 and saved about $1.60 for every dollar spent on wellness in 2002, Stanfield said. About half of the We Energies employees participate in the wellness program, and about 85% of those employees receive some cash reward.
Some other companies also offer wellness programs for their employees.
Harley-Davidson Inc. offers health risk assessments, free flu shots, a smoking cessation program and on-site fitness centers for employees. The company also pays for half the cost of a weight loss program if employees attend eight of 10 meetings of each 10-week session.
The federal government is recommending more employers follow the examples set by We Energies and Harley-Davidson.
Poor employee health is costing American businesses billions of dollars, according to a recent report from the U.S. Health and Human Services Department. Employers that encourage their employees to have healthier lifestyles save money, the report concludes.
A review of health promotion and disease management programs by businesses found a significant return on investment, ranging from $1.49 to $4.91 in benefits for every dollar spent on the programs, according to the report.
"More businesses need to recognize that poor health means lower productivity and higher health insurance costs," said Health and Human Services Secretary Tommy Thompson, former Wisconsin governor, in a prepared statement. "Smart business leaders increasingly are finding that it is the right decision to promote health education, physical activity and preventive benefits in the workplace."
Employers’ health care costs are expected to rise by 12% nationally next year, according to a survey by Tower Perrin, a benefits-consulting firm. However, health insurance costs for firms in southeastern Wisconsin are expected to rise by about 23% next year, according to a survey by Frank F. Haack & Associates, a Wauwatosa insurance brokerage.
One way employers can reduce their rising health care cost is by encouraging healthier lifestyles by their employees, some experts say.
Companies that encourage better employee health will save money on health care costs because fewer employees will get sick, meaning fewer will file health insurance claims, said Dick Tillmar, chairman and chief executive officer of T.E. Brennan Co.
Tillmar is the co-chairman on the health care team for the Metropolitan Milwaukee Association of Commerce Blueprint for Success and the vice chair of health care for the MMAC’s Council of Small Business Executives.
Companies with healthy employees benefit in other ways, Tillmar said. Healthier employees are in better shape and therefore are more productive on the job. In addition, they take fewer sick days and are less likely to leave their jobs, because they feel good about themselves.
"I believe you’re going to see a lot more companies spend a little dough to encourage their employees to take better care of themselves," Tillmar said. "The return on investment will pay off in spades."
Improving employee lifestyles is important because poor lifestyle choices, such as lack of exercise, poor eating habits and smoking, are the main causes of health problems, said Dr. David Severance, assistant clinical professor for the Medical College of Wisconsin.
"About 70% of all of the medical problems we see in the medical community are preventable and likely are associated with individual lifestyle," he said.
Those poor lifestyle choices lead to a variety of costly health problems that also cost businesses money. For example, obesity-related health problems alone cost US business an estimated $13 billion in 1994, including about $8 billion in health care costs, $2.4 billion for sick leave, $1.8 billion for life insurance and about $1 billion for disability insurance, according to the Health and Human Services report.
Improving lifestyles costs less than treating illnesses. According to the report, a health insurance plan’s annual costs for covering treatments to help people quit smoking ranged from 89 cents to $4.94 per smoker. The annual costs for treating smoking related-illnesses ranged from $6 to $33 per smoker.
Many companies are using a variety of incentives and other techniques to encourage their employees to take better care of themselves.
Some companies offer incentives such as a day off, cash or tickets to sporting events if their employees participate in a wellness program, Tillmar said.
Some businesses organize employee walks during break times. Others provide on-site exercise facilities, flu shots or employee discounts to health clubs. Some offer incentives for employees who smoke to take smoking cession classes.
Employers also can educate their employees about the importance of healthy lifestyles, Tillmar said. Posters, newsletters, seminars and classes can provide information about wellness issues, he said.
Oct. 17, 2003 Small Business Times, Milwaukee