4-1-1 on Comp: Five Things to Know about Wellness Programs in Workers’ Comp for 2018


By Bruce Burk

2018 has just begun and now is the time when everyone is making their new year’s resolutions. Now is a great time to talk about employee wellness programs while everyone is striving to get healthier and go to the gym more often. Wellness programs have potential to save both carriers and employers money. Here is five things you should know about wellness programs in workers’ compensation for 2018.

1) Wellness Programs Can Increase Employee Morale

A 2012 Gallup study showed that workers who are taken care of have 41% less healthcare costs than those who are struggling, and 62% less health care costs than employees who are suffering. 80% of employees report work as the number one cause of their stress. Wellness programs are a great way for companies to show that they care about their employees and can help lower the amount of stress in their lives. 

Studies show that increased stress can cause conditions such as hypertension or anxiety, which some workers may claim is work-related. “Basically, workplace wellness programs engenders happier employees, and happy employees work harder and more efficiently,” said Dr. Ellie Cobb, a Manhattan, NY-based holistic psychologist. Increased morale means better retention of good employees.

2) Wellness Programs Can Improve Productivity

A study by the Health, Performance, and Performance Study Committee at HERO found that 62% of businesses stated that productivity was the most influential factor related to employee wellness, while 92% believe that employee health has an impact on their productivity. “When employees’ needs are met and/or are provided resources for success via a wellness program, employers see high engagement, morale, presentee-ism, retention, and in most cases, improved health outcomes,” dietician Caroline Susie said.

Some studies show that employees are only truly productive for three hours a day. Wellness programs that offer things like company yoga or gym memberships can increase the employee’s cardiovascular health, which has a direct impact on concentration and productivity. Although obesity is arguably not a work-related condition, having employees actively engaged in healthy diets can make overweight claimants easier to treat, especially if it is seen as a hindrance to recovery.

3) Wellness Programs Can Minimize Claims

Early detection of employee symptoms is an advantage to a risk management department. If conditions are caught earlier, then overall the medical treatment will likely be lower to help with the condition. Wellness programs that help treat obesity can lower projected indemnity costs.

Obese claimants can incur 6.8 times higher medical costs, and are twice as likely to file a claim. Similarly, obese claimants had an indemnity duration that lasted 13% longer based on a recent study from NCCI. The longer a condition goes untreated, the more medical records that insurance companies need to review to make decisions about compensability.

Other research shows that the implementation of corporate massages show a 25% decrease in time off for workplace injuries. This can have a serious impact on temporary partial or temporary total disability benefits paid to claimants.

4) Wellness Programs Can Lower Employee Health Costs

RAND Corp recently put together a study that showed that companies spent $6 billion on wellness programs in 2013. The CDC did a study that shows sedentary adults spend $1,313 more on healthcare every year. Wellness programs are shown to provide an average of 28% reduction in sick days and an average of 26% reduction in overall health costs. In fact, the International Foundation of Employee Benefits Plans (IFEPB) found that every $1 spent on wellness will trigger $3 in savings in healthcare costs.

A recent RAND study showed that disease management resulted in an 86% reduction in healthcare costs and a 30% reduction in hospital admissions. That is a great investment for risk management with a demonstrated payout in the long run. However, companies may have a delayed return from wellness programs as employee health may take years to improve. “Some initiatives reduce costs in the short term, but there are lagging indicators that you won't see a difference for three to five years,” Larry Boress said, president of Midwest Business Group on Health. Therefore, risk managers should look for wellness programs with the highest demonstrable return on investment.

5) Wellness Programs Can Increase Risk Management’s Information about Employee Health

Any good wellness programs should require employees to get a yearly physical. Yearly physicals are a vital tool to workers’ compensation attorneys who are reviewing the claimant’s medical history. For cardiovascular claims, it is helpful to review the claimant’s annual blood pressure readings or ECGs. 

For orthopedic injuries, it is helpful to have past MRIs to review. Wellness programs allow the employer to encourage workers to submit to voluntary biometric testing to monitor for conditions such as heart disease, diabetes, arthritis, and cancer. Wellness programs should always be voluntary and should be fully compliant with ADA laws.

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