A recent study suggests many employees are even willing to pay much – or all – of the cost themselves.  Roughly 35% of firms with wellness programs focus on providing workers with convenient access to weight loss resources.

A poll of 1,352 employees by the Strategies to Overcome and Prevent Obesity Alliance found that many people would gladly chip in for the cost of the program if they believed it would help them lose weight. What employees want:

• confidential support and counseling
• access to a professional nutritionist or personal trainer, and
• onsite exercise programs.

Until recently, only big companies were able offer such programs as part of their wellness benefits. But the fastest growth of these programs in the last two years has been in smaller firms (sometimes with as few as 50 full-time employees).

The majority of firms split the cost with employees. Typically, workers pay up to about 25% of the cost. But some plans are fully employee paid.

A study released by the Urban Institute and the University of Virginia has caught some lawmakers’ attention, mainly because the study revealed a tax goldmine for funding health care. For example, the study shows over the next 10 years:

• A 10% excise or sales tax on fattening foods could raise $522 billion.
• A 20% tax could raise $937 billion.

Not surprisingly,  industry groups strongly oppose the idea.

An organization called Americans Against Food Taxes — supported by, among others, the National Restaurant Association, the American Beverage Association and the National Grocers Association –  argues that such taxes are unfair and unneeded.

The Urban Institute study points out that not only would fat-food taxes raise money, but they also would discourage consumption of unhealthy foods.

Industry groups aren’t crazy about that prospect, either.

Health care
Labor leaders in general are in favor of passage of Obama’s healthcare initiatives. They want to kick around some of the specifics:

They oppose enacting a tax on employee-provided health benefits to help finance healthcare reform. Fact is, a lot of union members get their health coverage through their employers, so organized labor isn’t keen on taxing the benefit.

They support the so-called public option for health coverage, in which a government entity offers insurance and competes with private providers.

Employee Free Choice Act
The original proposal sought to make unionization easier by offering a “card check” provision instead of a vote. The bill has hit a speed bump because supporters haven’t been able to rustle up 60 votes in the Senate to overcome a filibuster, and the seating of liberal Democrat Al Franken isn’t seen as the tipping point for getting passage.

All of that has forced union organizers to look at alternatives and compromises. They’ll be looking to the President for encouragement and ideas.

Bottom line: The card-check provision of EFCA may be dead, but the bill isn’t — yet.

Consider a report by the Henry J. Kaiser Family Foundation on employer-based health coverage. The report looked at the coverage trends since 1999. Here are some of the key numbers:

Percentage of firms, categorized by numbers of employees, that offered health benefits in 1999

• Up to 9 employees: 56%
• Up to 199 employees: 65%
• More than 199 employees: 99%

Percentage of firms categorized by number of employees, that offered health benefits in 2008

• Up to 9 employees: 49%
• Up to 199 employees: 62%
• More than 199 employees: 99%

The data would appear to show that employer-based coverage has dropped a bit since 1999, but only a bit. Nearly the same percentage of employers are offering coverage.

The conclusion: Employer-based coverage is still the prevalent option for American workers, particularly those who work for midsize or large firms.

1. Repeal of some Bush tax cuts. Obama favors:

• reinstating the pre-2001 top individual tax rates of 39.6% and 36% for families making more than $250,000 ($200,000 for singles)
• making permanent the 10%, 15%, 25% and 28% individual tax rates, and
• restoring the personal exemption phaseout and itemized deduction limitation phaseouts at an increased threshold of $250,000 for joint filers ($200,000 for singles).

 
2. Higher FUTA wage base. Employers would have to contribute more into the federal unemployment tax system – especially those located in states that still have a $7,000 wage base.

3. Changes in healthcare financing. Although you probably won’t see a universal healthcare push, employers that don’t offer or make a “meaningful contribution” to the cost of employee health care will probably have to contribute a percentage of payroll toward the costs of a national plan. That could affect employee payroll deductions.

4. Increased payroll taxes. Maybe you’ve been hearing reports of additional Social Security taxes, but they likely wouldn’t take effect for years and they’d be phased in over a long period. Any such tax would be at a rate of between 2% and 4% (split between employer and employee). It would apply to income above $250,000 and:

• eliminate the $102,000 ceiling for the Social Security tax, and
• create a “donut hole” exemption for earnings between $102,000 and $250,000.

The bad-news numbers on wellness come from HR consultant Hewitt Associates, which asked employers that have various wellness programs to gauge employee participation.

• Only 4% of smokers took part in employer-sponsored smoking-cessation programs.
• Just 5% of overweight employees signed up for weight-reduction programs.
• One out every 10 employees who suffered from chronic ailments such as diabetes, asthma and heart disease took part in programs designed to address those problems, meaning of course that 90% of eligible employees ignored the programs.

What did work
Why didn’t those employee-sponsored programs work? The reasons are varied and complicated. So probably the better approach is to look at employers whose programs did work, in that they got decent participation and good results.

To learn about that, HR Morning conducted its own survey of 1,174 HR managers to ask about whether they linked wellness to health care and whether they were successful. The HR execs who said they had some success pointed to health-risk assessment as the key — and getting employees to understand that assessments were in their best interests, and not just a way for the company to save money.

That matches some other research by Hewitt that indicates companies have a lot more success with wellness when it starts with a health-risk assessment, in which the employee answers questions about his or her health and gets back a report on which health problems need to be addressed and how to address them.

Compare the low participation rates above with these tied to health-risk assessments:

• According to Hewitt, 55% of workers who completed a health-risk assessment say they’re taking the recommended action.
• 35% said they plan to take action.
• Only 10% of employees don’t plan to take action to improve their health, based on the health-risk assessment feedback.

Warning
Here’s a warning, though, about what makes health-risk assessments unsuccessful: The companies that got the worst results usually:

• Required employees to complete the assessment. That is, when the assessments were mandatory, employees pushed back by refusing to follow the recommendations of the assessments.
• Emphasized the money-saving aspect. When employees perceived the assessment was just another way to increase employer profits, failure was almost guaranteed.

The survey was conducted by the Mercer consulting firm. Here’s a compilation of the responses (the numbers add up to more than 100% because some companies are trying more than one approach):

• 59% said they intend to keep down rising health care costs in 2009 by raising workers’ deductibles, copays or out-of-pocket spending limits.
• 47% are encouraging enrollment in plans with lower premiums and higher deductibles.
• 19% will start offering a consumer-directed health plan — a high-deductible plan with employee-controlled spending accounts. They encourage employees to save account money by shopping for the best health bargains; the employees can keep the savings for future needs. That’s up from last year’s figure of 12% who said they were very likely to adopt a consumer-directed plan.

More from the study:

• On average, health care costs will go up by an estimated 5.7% next year for workers and their employers. That’s the same as this year’s 5.7%  and slightly less than the 6.1% jump in 2007.
• During that same period, wage increases have averaged slightly under 4%.
• In the last five years, the average health-plan deductible for an individual grew from $250 to $400. For a family, it rose from $1,000 to $1,500.

As part of an ongoing series, we’ll have practicing HR managers present real problems they faced and how they solved them. Here’s Eva Savidge’s. 

Our problem was two-part but certainly not unique: (1) out-of-sight healthcare costs, and (2) employees who were unhappy about it.

As a midsize company, we weren’t able to do a lot to hold the line on company health costs, besides raising employee premiums and co-pays. We weren’t sure that we could make much headway toward solving the problems, but we figured we ought to show our employees that at least we were trying.

One way to start: A lot of our employees are over age 40, and having vision care was important to them. No, we couldn’t afford to add free vision care to our health plan, but we did the next best thing.

A healthy discount
We called a highly recommended local optician and asked what kind of deal he’d make us for checkups and eyeglasses if we promised to send all our employees to him. Turns out, his offer represented a healthy discount on the going rates.

We agreed to make him our exclusive eyecare provider and gave our employees his special rates.

The idea was an immediate hit. At the least, it provides employees with a bit of a break in their health costs – and they do appreciate the fact that we’re trying to make health care less expensive for them.