Financial Wellness

New Rules for Wellness Plans Offer Savings for Employers and Employees

Beginning in 2014, the Affordable Care Act allows employers to reduce the cost of employees' health insurance premiums when they participate in programs encouraging exercise, smoking cessation, weight loss or even health screenings for high blood pressure, cholesterol, and so on.

The new rules will allow employers to offer premium reductions of up to 30 percent for employees who take part in most wellness programs as compared to only 20 percent reductions offered in 2013. It also increases the maximum reward to as much as 50 percent for programs designed to prevent or reduce tobacco use.

The critical factor, according to the government, is that these programs must have a "reasonable chance" of improving employee health.

Choosing Wellness Program Elements

So what wellness program elements offer the best opportunity to improve health? To a large extent, poor health is an outcome of three lifestyle choices -- smoking, poor nutrition and inactivity. In fact, these three lifestyle choices are responsible for about 75 percent of U.S. healthcare spending. However, it is very difficult to address all three at once and most experts recommend starting with one.

And if you have to pick one, physical activity is by far the best option. It's simple, free, everyone can do it and, according to the CDC, has a positive impact on nearly every major healthcare issue in the US including Type 2 diabetes, heart disease, obesity, mental health and cancer.

Just 45 minutes of physical activity a day can have a significant impact on all of these health issues. That is why physical activities such as walking and running are part of almost all successful wellness programs. Additionally, it should be noted that offering financial incentives alone to participate in wellness programs doesn't buy long-term engagement, only short-term compliance.

And if wellness programs aren't engaging, workers lose interest quickly, programs become far less effective and savings are illusory. Fortunately, documented studies that FitLinxx has undertaken demonstrate that combining the right technology with effective wellness programs results in long-term user engagement and positive behavior changes.

The numbers are impressive: many companies report 70 percent engagement rates after three months.So what is this secret recipe for creating engaging wellness programs?

  1. Make them simple - Programs need to be intuitive, easy to use and part of someone's daily routine. You cannot expect people to make major changes to their daily routine to accommodate a wellness program, so a wellness program must be designed to fit into someone's life.
  2. Make them social - Programs should offer communities, individual competitions, team challenges, games and connections to social media like Facebook. These social connections can strengthen an individual's commitment to the wellness program.
  3. Make them rewarding - Programs should include incentives. The incentives can come in many forms like cash, gift cards and prizes, but we see the best results when they are part of a value-based benefit program and tied to a Health Savings Account or other healthcare savings vehicle.
  4. Provide support and guidance - Programs should offer the necessary support to make individuals successful. Many people are new to wellness programs and may be scared or apprehensive. Providing support from a physician, a coach, a knowledgeable community or a caregiver can make all the difference.
  5. Make them personal -- One size does not fit all. Programs should allow individuals to create a custom experience that meets their personal needs and motivates them. Some people love competitions, other people do not. Some people like social media, others do not. The key is to provide the elements identified and let individuals select the ones that are right for them.
  6. Get leadership buy-in, support and participation - It's imperative that organizational?leaders establish a wellness culture and actively participate in the wellness program. Without the proper organizational culture and leadership support, the best-designed program will still fail.

While it may seem straightforward to get employees to be active physically for only about 30 minutes a day, the fact that nearly two-thirds of Americans don't achieve this speaks to the need to find solutions that offer, as the Affordable Care Act states, a "reasonable chance" of success."

Thus, program providers and employers should take to heart these suggestions for increased employee engagement and long-term success.

About the Author:

Dave Monahan is President and CEO of FitLinxx (, a provider of health and wellness technology that motivates people to live actively and improve their well-being.

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