Exploring Employee Benefits and Wellness Programs
The integration for effectiveness and efficiency.
This article is about seeking clarity and proposing questions regarding the interaction between employee benefits, specifically medical insurance, and wellness programs. Integrating employee benefits and wellness programs may be of significant mutual benefit. This may be through data exchange, return-to-work opportunities and the interplay with workplace culture and psychological health and safety, or the nuances of provisions and plan administration which wellness programs could serve as an asset for. The first two pieces, data exchange and return-to-work opportunities, are documented practices for some of us, but albeit could be more commonly practiced, and the provisions and administration piece is granular thinking which could be made possible depending on appropriateness and doing no harm to existing business operations. The perspective of this article is that of a single-employer plan, but select principles may apply for multi-employer, association, and creditor plans.
Employee benefits are centred around the balance for an insurer to provide the plan members (employees) with adequate coverage while at the same time providing the plan sponsor (organization) with a mechanism to control costs. Both over-insuring and under-insuring have their cons, and the same goes for plans across the spectrum of funding arrangements (insured non-refund, insured refund, and self-insured). Employee benefits are an important part of the overall idea of comprehensive workplace health for the organizational accountability aspect. Organizational accountability revolves around what the organization does or provides in terms of employee health, which in addition to employee benefits can also include policies, practices, and environmental supports. In comprehensive workplace health, organizational accountability is balanced with individual accountability, the more common type of accountability, in terms of individual behaviour change through wellness programs.
Traditionally, of the three areas of employee benefits, wellness programs fit into the ancillary benefits category (benefits that reflect needs which influence an individual’s well-being and work productivity); the other benefits categories are core (primary needs) and optional (additional) benefits. But, could wellness programs play a larger role in employee benefits and not solely be positioned as ancillary? Which means of cost-containment, uncertainty reduction, or effectiveness of quality improvement could wellness programs further serve as win-win scenarios between employee benefits and wellness programs? Three areas to be explore are data exchange, return-to-work opportunities, and provisions or administration.
Each year, survey findings from the annual Sanofi Canada Healthcare Survey seem to be highlighting the impact of wellness programs more and more, which can give rise to workplace wellness culture, having an effect on plan member ratings for the quality of the benefit plan and meeting needs. Shown below are a few of the findings from the 2020 survey in the form of infographics. A line of text from the survey specifically reads, “wellness programs take centre stage”. Why this may be the case can also be explained by the three aforementioned, about detailed next, areas of data exchange, return-to-work opportunities, and provisions or administration.
1) Data Exchange
By having a two-way exchange of data between employee benefits and wellness programs, could cost reduction and quality improvement be achieved?
The exchange of data between employee benefits and wellness programs could help with the analyzing of each to help keep offerings current, competitive, and in-alignment with employee needs/wants. In the plan design of employee benefits, this can referred to as the functional approach. Characteristics of the functional approach include analyzing the employee benefits presently available under the benefits plan in terms of the needs or objectives, and considering recommendations for changes in the present benefits plan to effectively meet any gaps in benefits.
Wellness program data can feed into benefits plan management, specifically plan design, through informing the experience analysis. Such metrics may include:
- biometric screening participation and data
- health risk assessment completions and data
- participation or satisfaction regarding wellness initiatives, activities or trainings
- survey/questionnaire/audit data
- technology engagement (enrolled, still using platform, interests within platform)
- website clicks, time on respective pages
- business operations and strategies including first principles or themes of wellness
- questions asked/inquiries
- resource downloads
- optimizations to the workplace environment
- video views and watch time
- newsletter opt-ins, open rates
- webinar registrants, webinar viewers
By using wellness program data to inform employee benefits through means such as the functional approach, the goal is to identify problem areas and abuse for a better and more cost-effective utilization (cost control strategies and proactive plan design changes) for employee benefits. On the other side of the coin, the employee benefits data, in the form of reports, which may be useful for wellness strategic planning, could include the titles of: disability claims reports, drug utilization reviews, historical claims reports, provider analysis, or standard experience reports. These reports may certainly be shared during plan reviews at specific time points, or during the renewal period. It is by realizing how specific drugs impact claims costs on the individual level and therefore plan costs at the group level, that action can be taken to implement preventative approaches through a wellness program. The case for this may be termed by loss control techniques such as loss prevention (reducing the possibility of frequency of loss for any risk that cannot be avoided) or loss reduction (reducing the impact of the loss once it has occurred).
Ask yourself, what is a particular type of claim (i.e. health condition) or particular benefit that is adversely affecting overall experience of the benefits plan? The wellness program can adapt to the health conditions (identified through ICD-9 or 10 categories, classes of drug, type of disability, or themes of paramedical provider or spending account use) for planning and creating actions plans. Using results to identify changes can provide valuable insight into where expenses are incurred, limit potential plan waste, and any claims/experience trends that exist. What is common on the employee benefits side can then be common on the wellness program side to practice prevention.
2) Disability Management
Could an effective rehabilitation approach for return-to-work (RTW) opportunities, a component of disability management, include the involvement of a wellness program?
Disability management is the process of minimizing impact of injury, illness or disease on the plan member’s ability to be effective in the work environment. This is about increasing the chances of a plan member’s return to his or her own job or some form of employment. Involving wellness programming into the disease management process could further signify the plan sponsor’s concern for disabled plan members and fulfill commitments to the thriving of plan members. There is existing literature on wellness programs playing a role in disease management, illustrated by the Integrated Absence and Disability Management Continuum (sourced from Group Benefits Plan Management — 2nd Edition [International Foundation of Employee Benefit Plans]) — but is it common practice? In reality, beyond literature, are disability management and wellness programs too often still operating in silo’s?
Wellness could matter for disease management because of possible ability of early detection and introduction of preventative measures through programming. As a specific example, a wellness program could include medical consumerism which can improve employees literacy in wellness and therefore benefits options for treatment options, and learning how to select a physician or medical professional. In a sense, becoming an empowered patient, to then influence and avoid the severity of prolonged disease states (a reference to benefits utilization as well). This is important because utilization remains the largest driver of growth in drug costs in private drug plans, no matter the cost of treatment and pharmaceutical selections. All in all, employees who have higher medical consumerism, wellness, and benefits literacy could report claims quicker, and earlier in the state of adverse health or early warning signs, to possibly result in shorter durations, more favourable nature of claims (less severe), lower frequency of unpredictable claims, and lower average claim amounts.
On a big picture level, has someone made the connection that psychological health and safety, which can be built into wellness programs, can be a disability management tool bringing a means of value through early intervention (recognizing symptoms, safe conversations, empathy, caring for the whole person, active listening) and RTW (providing growth, purpose, recognition, vulnerability, fairness, and support with accountability)? Along similar lines is the idea of creating a culture of health for an organization whereby it is not a weakness to use support of employee benefits (or EAP [employee assistance programs] as well) and address medical conditions. Alternatively, for a culture of health, the hopeful ability to develop self-awareness and honesty to avoid moral hazards with insurance where a proposed insured indicates that dishonest action in the insurance transaction which increases the possibility of a loss/risk. Doing so, the psychological health and safety and culture of health presence, could be a means for a reduction in the amount of claims payments under the long-term disability (LTD) benefit and improved costs because of shortened durations associated with LTD claims. Not to mention the possible lower need to charge for the disabled life reserve, which is defined as the current value of all future periodic payments to the LTD claimant and is a component of setting premium rates and year-end balances. This is all after the fact that wellness programs could be an asset for introducing during short-term disability (STD) as well, to prevent LTD from being reached in the first place. Perhaps similar thinking can be mentioned for wellness programs to also serve as a form of self-care for rehabilitation post critical illness benefit payments. Doing so can be interpreted as getting wellness programs to those who need it most, and in a non-intrusive and ethical manner. Remembering appropriateness, acceptability, accessibility, and safety. The premise here, motivating the plan member and psychological safety as components of first steps in the rehabilitation process.
In Group Benefits Plan Management — 2nd Edition, the following excerpt is presented: “insurers are aware of the complexities that affect LTD claims [psychological health and safety as well as change management], including problems within the organization such as personality conflicts, poor performance or a company’s decision to downsize, which often limit the plan member’s chances of RTW. For example, sometimes a problematic solution at work is a factor in the disability, which should be addressed by the disability case manager.” Going in detail, this can include identification of significant barriers to early RTW, proactive strategies to reduce the incidence of workplace accidents, and policy statements that outline the rights and responsibilities of the plan members and plan sponsor to ensure that all plan members are treated equally; all for successful disability management engaging both the plan member and the plan sponsor to increase the chances of return to his or her own job or some form of employment. By doing so, and incorporating human resources (HR) as a business partner, can even lean towards the gold standard of disability management which is referred to as health and productivity management.
3) Provisions or Administration
Plan administration, which includes claims processing, is a vital aspect of benefit plan management as employees may not fully appreciate the value of a benefits plan until they receive payment for a claim and undergo the adjudication process. Thus, being prompt and efficient are key factors for employee benefits satisfaction. This can still be relevant even with the presence of a third‐party administrator (TPA). For the following administrative steps or happenings, mention of a wellness program could be made apparent and serve as an asset or point of satisfaction. As previously mentioned, doing so can be interpreted as getting wellness programs to those who need it most, and in a non-intrusive and ethical manner. Again, remembering appropriateness, acceptability, accessibility, and safety. The following can be considered in plan administration, with some overlap for consideration during plan design and the provisions as well.
- In the explanation of benefits (EOB), which is given as a step in the administration processing of claims for communicating adjudication decisions to appropriate stakeholders, wellness programs could be mentioned as a relevant note
- Components of a wellness program, such as a wellness newsletter, technology platform, calendar, trainings, or activities, can all mention the employee benefits plan such as updates or reminders, serving as additional means of communication regarding the benefits plan
- A new employee may not be eligible for enrolment into the benefits plan until a waiting period is satisfied, but during the waiting period, the may be employee introduced to components of a wellness program, such as webinar recordings, podcast episodes, or a wellness blog (at no additional cost to the insurer or organization)
- Wellness programs could be included as an item in the performance standards agreements (PSA) of a benefits plan to help act as a form of providing another input for good governance
- Regardless of what the decision is for the coordination of benefits (COB) among insuring parties, there could be a means to someway somehow ensure that regardless of which insuring party is the first or second payer of the claim, that the employee is provided access to an existing wellness program from one of the insuring parties
- If benefit plans are contributory, or changed to contributory from non-contributory, whereby the plan members pays a portion of the premiums, which can create altered employee relations and morale outcomes, employees could then be given the opportunity to have a wellness program so that the interpretation of value and support from the insurer or organization is still felt by employees
- For employees who are late applicants or applying for optional/additional coverage, both of which may require satisfactory evidence of insurability, perhaps employees be more likely to have their evidence of insurability accepted, if the employee has wellness program involvement (which is where wellness program data for tracking can come in)
- If coverage is the same for all plan members of an employee class regardless of the individual employee’s needs, which is a standard characteristic of group insurance because it avoids discrimination practices, could a wellness program be inserted as another way to meet individual employee needs due to the ability to offer various and customized/individualized features of a wellness program? (for example — leveraging interest survey data and the algorithms which exist within wellness technology platforms to create customized wellness program experiences)
- For spouses and dependents who may be included in the benefits plan, they could be informed about wellness program offerings such as community events or vendor perks in terms of discounts at various wellness-related establishments
- Wellness engagement by employees could be documented in a non-intrusive or discriminatory manner into the claim history of an employee which could be of value for future benefits plan decisions or claims adjudication factors (claims history is usually retained for seven years)
- To possibly include wellness needs/wants during the marketing process when organizations are creating request for proposals (RFP’s) and including content in the accompanying cover letter or questionnaire (a connection to needs‐based sales practices for being appropriate to client needs). Questions about a wellness program can then be made apparent during finalist presentations
- The wellness program itself, if highlighting or leveraging medical professionals as vendors, for those medical professionals to be chosen as possible options within the preferred provider network for paramedical providers which is favourable for claims costs
- To think about expanding the list of paramedical providers which cater to employee needs/wants to include alternative or novel heath personnel or modalities
- For another note on expanding, expanding the possible presence of eligible medical expenses (which can be allowable expenses for the purposes of deductions for an individual taxpayer) to include items relating to holistic health and prevention
The practice of integration between employee benefits and wellness programs through data exchange, return-to-work opportunities and the interplay with workplace culture and psychological health and safety, or the nuances of provisions and plan administration which wellness programs could serve as an asset for, serve as thoughts for effectiveness and efficiency. This is more abstract thinking than the typical financial return-on-investment (ROI) theme between employee benefits and wellness programs, which then is implicated with renewals/premiums. In a sense, this abstract thinking seems of different ROI, and instead shifts to perhaps shorter-term ROI in that of clinical ROI or cultural ROI.
- CDC Worksite Health Scorecard
- International Foundation of Employee Benefit Plans (IFEBP)
- 2020 AON Global Medical Trend Rates Report