3 Big Reasons Wellness Programs Have a Long Way to Go

Do wellness programs do more harm than good? As recent research suggests, the programs don’t seem to be catching on quite like employers had hoped.

A study done by Towers Watson and the National Business Group on Health indicated that of the 1,669 employees surveyed, half didn’t participate in any wellness initiatives. Even generous financial incentives weren’t enough to sway all of their employees to join in. Why?

The benefits of wellness programs are significant; better performance, lower absenteeism, and strengthened loyalty to name just a few. So the big question is why don’t those non-participating employees want in?

Unfortunately, employer’s seemingly good intentions are wrought with very serious legal dilemmas and could be costing more than they bargained for.

Why don’t those non-participating employees want in on wellness programs?


The Privacy Issue

Currently, the proportion of employees that discern lack of privacy as their reason for not participating in wellness programs is relatively low. However, further investigation into companies that manage wellness data has cast a cloud of doubt over the validity of wellness programs.

In a recent CNN article, Jay Hancock of Kaiser Health News explained that during his research of how privacy is affected by Wellness Programs, it was discovered in the fine print of several wellness vendors’ privacy agreements that many of them are not bound by HIPAA laws, a fact that is unknown to many employees.

It’s commonly believed that nearly all entities with access to personal information have to adhere to HIPAA laws, but, sadly, that isn’t the case. And though many of these types of vendors claim all the data observed is anonymous, there are still mandatory provisions which require the relinquishment of data to third party vendors for marketing purposes.

It seems harmless until we look at the fact that researchers have already proven that it is possible to identify people based on factors like birthday and zip code. Imagine how much easier it is to decode that information when you’ve got someone’s entire medical history at your disposal.

The EEOC Issue

More and more companies are taking aggressive approaches to get employees involved in corporate wellness like having mandatory wellness programs, offering financial incentives, and penalizing non-participatory employees.

Some of those companies have already been sued by the EEOC on the basis that such provisions violate the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). In April, the EEOC proposed a wellness rule addressing the issue of financial incentives in employer wellness programs.

Though the proposed rule aims to limit financial incentives, it does not remove them entirely. Are financial incentives fair? Should there be alternative programs with incentives for employees that don’t wish to participate in wellness, such as education programs?

Those are questions that will undoubtedly continue to bother employers in their quest for a happy, healthy, and, most importantly, high performing workforce.


The Cost Issue

The value found in benefits like employee retention, absenteeism, and job performance has masked the unfortunate realization that many companies lose money on wellness programs.

Even more so, a recent study conducted by the Population Health Alliance (PHA) and the Health Enhancement Research Organization (HERO), revealed many surprising costs induced by wellness programs.

Compiled were monetary costs, indirect costs, and what the authors have labeled “tangential” costs (unquantifiable costs). Just to name a few:

●      Even with the omission of several costs including incentives, extra medical expenses, internal staff costs, and wellness consultant costs the report showed that the companies, observed over a two-year period, experienced a net loss of $0.50 per employee per month.

●      Employee morale decreases as more emphasis is placed on personal health. This is especially true in companies that “bully” their employees into wellness programs by making them mandatory or inflicting penalties for non-participation.

●      Indirect costs include areas like employees’ time dedicated to wellness efforts outside of work, communications/print materials, and data reporting costs.

●      Companies with aggressive wellness programs risk legal challenges, which negatively affect the employer brand and, again, cost money to rectify.

In addition to the long list of costs proposed by the report, there has been considerable thought to whether wellness programs contribute to over-testing (driving up the cost of health care), which can lead to false positives and unnecessary medications.


The Case for Wellness

The case for wellness programs is being questioned by some heavy hitters and what’s more is there is solid data that helps disprove the validity of such programs.

As employers start experiencing some of these unintended costs, will wellness programs start to phase out? The value of these programs is not lost on all employees, but you simply can’t please everyone.

It’s time for companies to take a good, hard look at what they’re getting out of these initiatives before they get blindsided by potentially toxic consequences.

The Olson Group can help your organization make better decisions surrounding the implementation of a wellness program. Contact us today to get started on planning a wellness program for 2017.


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