Three advantages to spending more on health care: Reduced turnover, improved productivity and higher sales. Check out the healthcare strategy this business used to benefit from them all.

For years, Burgerville, a restaurant chain based in Vancouver, WA, offered limited health coverage to hourly employees.

Result: Just 3% of hourly workers were enrolled.

But when an employee survey showed health costs were employees’ No. 1 concern, the company decided to switch up its coverage and pay 90% of healthcare premiums for hourly employees who worked at least 20 hours per week.

Under this new plan, individual hourly workers can enroll in a health-maintenance organization for $15 per month with no deductible. A worker and spouse pay $30 per month, and family plans cost $90.

Result: Burgerville’s healthcare bill skyrocketed from $2.1 million per year to $4.1 million. But its turnover rate dropped to 52% from 128% in one year. And having to replace and train fewer workers led to huge cost savings. Now, 98% of the company’s eligible hourly employees are enrolled in the health plan.

Because employees must work 20 hours to qualify for the plan, they now work harder to qualify for more hours, which are assigned based on performance, Burgerville’s Chief Executive Jeff Harvey told the Wall Street Journal.

Result: Sales rose 11% in one year.

Only 28% of employees today say their overall health is excellent — down from 34% six years ago, found The State of Health in the American Workforce, a study just published by the Families and Work Institute.

The study also shows that men’s overall health is declining faster than women’s.

But the most troubling stat: Nearly half (49%) of employees admitted they hadn’t engaged in regular physical exercise in the last 30 days. And 22% of those workers hadn’t exercised rigorously at all in the last 30 days.

With employers more concerned — and active — than ever with trying to trim healthcare cost increases by getting employees to live healthier, this does not come as good news.

Two reasons employers’ efforts aren’t paying off:

• One in four workers continue to smoke, despite growing incentives to join smoking cessation programs, and
• Stress levels are rising — 40% of employees say they feel stressed regularly.

Most common treatments

• High blood pressure (21%)
• High cholesterol (14%)
• Diabetes (7%)
• Mental health (4%)
• Heart conditions (3%)

Four congressional committees have approved healthcare-reform bills. Here’s what’s been OK’d so far.

The approved stipulations are sure to be blended with and modified by other bills being considered, but here’s what’s on the table right now

• How much it’ll cost: $1.5 trillion spread over 10 years.
• How it’ll be paid for: $500 billion from cuts in Medicare and Medicaid, $580 billion in taxes, $200 billion in employer penalties for not providing coverage.
• Employer requirements: Except for small businesses — with annual payrolls of less than $500,000 — employers must provide health coverage.
• Employee requirements: Must have coverage or face a tax penalty, with exemptions for hardship.
• Who’s eligible for subsidies for coverage: Starting on 2013, those with incomes of up to 400% of the poverty level.
• What types of benefits coverage will provide: Hospitalization, doctor visits, prescriptions; no denials for preexisting conditions.
• How plans can be chosen: A National Health Insurance Exchange.
• Government plan: Available through the exchange.
• Uniform changes to Medicaid: The program will be available to all with incomes up to 133% of the poverty level, instead of leaving eligibility requirements up to the state.

President Obama’s plans for healthcare reform could have some nasty tax consequences for employees.

Congress is looking for ways to raise more than $1 trillion in new tax revenues to finance health care for the uninsured. At the top of the list: several proposals that would cut employees’ take-home pay 9% to 14%, depending on their household income and tax situation. Several of the plans under consideration would require Payroll to treat as taxable income:

• health insurance premiums
• dental premiums
• vision premiums
• flexible spending account deposits, and
• health reimbursement arrangement contributions.

Right now, employees don’t pay taxes on these benefits because they’re deducted from their paychecks on a pre-tax basis.

Specifically, the proposals the Employer Council on Flexible Compensation reports are under consideration include:

• capping this proposed group health tax exclusion at $6,800 for individuals and $17,240 for group coverage in 2013
• imposing the cap on all workers with group coverage, or
• imposing the cap only on those earning more than $100,000 per year (married couples, more than $200,000) per year.

For more info
To see how the proposals might affect your own paycheck, go to www.nohealthbenefitstax.com and click on “Worksheet: How the health tax impacts your paycheck” on the right-hand side of the screen.

You’ll enter data such as income and tax status; employer’s benefit contributions; and pre- and post-tax benefit contributions. The spreadsheet will show your take-home pay (as entered) as of today, then calculate how much it could decline under each of the proposals. Another chart shows the increase in employer FICA, based on the values entered.

The cost to insure the average family in the U.S. last year was $16,771 when coverage was obtained through an employer, according to a report by benefits consulting firm Milliman, Inc. And worker contributions to that coverage have been going up.

Some of the key numbers from the report:

• About 170 million Americans get their health insurance through an employer.
• Healthcare costs, via premium payments and out-of-pocket medical expenses, now eat up 14% of the average household income of about $50,000.
• Costs went up an average of $1,162 per family this year from the average of $15,609 last year.
• Employers’ contribution to workers’ monthly premiums increased by 5.4% over the past year, but employees’ contributions went up 14.7%.
• Employers paid an average contribution of $9,947 per worker. Employees paid an average of $4,004 in premiums and an additional $2,820 in out-of-pocket expenses.

A glimmer of good news: The report showed that costs are rising but not quite as rapidly as they had in prior years.

Click here to see the full report.

Previous efforts to push wellness in the workplace were met by objections — and occasional lawsuits — from employees and advocacy groups who said “wellness” was just another term for “invasion of privacy” and an attempt to control employees’ lives outside the workplace.

Rumblings out of Washington indicate, however, that the White House — with help from a friendly Congress — would like to change some of the rules on wellness mandates if the changes will lower healthcare costs.

What’s coming — what’s changing
The Administration has sent several proposals to Capitol Hill and asked members of Congress to consider the ideas, such as giving employers tax credits for:

• programs that offer periodic screenings for health problems
• counseling to help employees adopt healthier lifestyles
• smoking-cessation programs
• treatment of obesity
• physical fitness
• nutrition
• treatment of depression

To allow employers to fully implement such programs, without penalty or fear of lawsuits, the Administration would have to overcome some legal obstacles. For instance:

• A 1996 law prevents group health plans from discriminating against people because of their health status or medical history. Charging those people higher premiums or denying them the rewards that healthy people might get could be considered “discriminatory.”  That’ll have to be changed.
• If an employer offers financial incentives to employees for lowering cholesterol, losing weight or stopping smoking, the amount of such rewards generally may not exceed 20% of the cost of health coverage. Under current laws and tax codes, employers who want to offer greater rewards can’t do so. The Administration and Congress are looking at loosening those rules and letting employers decide the limits of the rewards.

President Obama vowed that he and Congressional Democrats will push through a healthcare bill by summer.

First, the President and Congressional leaders say the overall point of the legislation is to create a public healthcare system that covers 46 million uninsured Americans. Early volleys and opposition from Republicans center on:

• a stipulation that would cap the employer tax deduction for providing employee insurance
• how the system will be funded and how much it will increase the deficit
• whether such a system would undermine the traditional private system of insurance and care

Who’ll pay for it?
How to pay for the estimated $1.5-trillion cost over 10 years?  Congressional estimates point out that the tax exemption for benefits annually costs the government  between $246 billion $297 billion — money that could be used to fund a government-run program.

Most proposals, however, don’t call for completely doing away with the tax exemption, but rather limiting it, a move that could raise $700 billion over 10 years, according to consultants from the Lewin Group.

On top of limiting tax deductions for employers and employees, among the proposals floating around Capitol Hill are plans to raise taxes on alcohol, soft drinks and foods high in fat and salt. Health advocates in Congress are saying that’ll create a double benefit of raising money and encouraging better eating habits.

Congressional leaders say they’ll hammer out a bill by July and get action on it before the August recess. The goal: to have a final plan effective Jan. 1.

The full proposal from Congress is summarized in a report authored by Sen. Max Baucus (D-MT), Chair of the Senate Finance Committee.

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 U.S Dept. of Labor has closed the books on comments on the new proposed FMLA regs and is on target to release the updated version in January. Here’s look at the seven likely revisions.

Kelli Thompson, an employment-law attorney with the firm of Baker Donelson Bearman Caldwell & Berkowitz, sees them shaking out this way:

1. Employee Eligibility Standards
Current: In order to be eligible for FMLA leave, an employee must have 12 months of service with his or her employer and have worked at least 1,250 hours during that 12-month period. What was murky in the regulations: The months of service didn’t have to be consecutive, but no one was quite sure how far to go back and how long a break in service had to be before an employer could refuse to include the time in the total 12-month period.
Proposed revision: The proposed regulations clarify that employers are not required to count prior periods of employment which occurred before a break in service of more than five years. There are a few exceptions, such as breaks for military service or if the employer has approved a period of unpaid leave and agreed in writing to reinstate the employee. Similar exceptions are made to the requirement that employees must have worked 1,250 hours in order to be eligible.

2. Serious Health Condition
Current: The regulations provide for leave in connection with a period of incapacity of more than three consecutive calendar days so long as the employee or family member has either (a) one visit to a health care provider plus continuing treatment, or (b) two visits to a health care provider.
Proposed revision: The proposed regulations clarify that the two visits to a healthcare provider must occur within 30 days of the beginning of the period of incapacity unless extenuating circumstances exist.

Current: The regs now allow for leave in the event of a “chronic” serious health condition.
Proposed revision: The proposed regulations specify that in order for a condition to qualify under this definition, it must have resulted in at least two visits to a healthcare provider annually.

3. Waiver of Rights
Current: The reg specifically prevents employees from waiving their FMLA rights. That lead to confusion over whether this prohibition only covered prospective waivers or also included retroactive waivers, such as those in settlement and severance agreements.
Proposed revision: The proposed regulations clarify that while employees may not prospectively waive their rights under the FMLA, they are permitted to waive the FMLA rights retroactively with or without the approval of the courts or the DOL.

4. Employer Notice to Employees
Current: Employers are required to designate leave as FMLA-qualifying within two business days unless there are extenuating circumstances.
Proposed revision: The proposed regulations extend the two-day requirement; employers will have five days to notify employees whether a planned leave will be FMLA-qualified. The countdown on the five days begins when the employer learns of the employee’s potential FMLA- qualifying condition.

Note: The DOL revision proposes that this notice to employees include eligibility information, employee responsibilities and the consequences to an employee in the event of noncompliance. Additionally, if a planned leave is found to be nonqualifying, the employer must explain why in the five-day notice. To assist in implementing these changes, the DOL has further proposed a new prototype notice form.

And in accordance with the U.S. Supreme Court’s decision in Ragsdale v. Wolverine Worldwide, Inc., the proposed regulations clarify that employers may retroactively designate leave as FMLA-qualifying provided doing so does not cause harm or injury to the employee.

5. Employee Notice to Employers
Current: An employee does not need to mention the FMLA specifically in to invoke its protection.
Proposed revision: The proposal requires employees to provide specific information to employers before the employer’s FMLA responsibilities kick in. Specifically, an employee’s notice of leave should include:

• some indication that a condition renders the employee or family member unable to work
• an estimated duration of the absence, and
• whether the employee or family member plans to visit a health care provider. And an employee cannot trigger the employer’s obligations to further investigate whether an absence is FMLA-qualifying simply by calling in sick.

The proposal further provides that employees must respond to inquiries by their employers for the purpose of determining whether an absence is the FMLA-qualifying. If they do not, denial of the FMLA leave is legal.

6. Contact with Healthcare Providers
Current: Employers access to FMLA-related medical information is restricted. Employers cannot request specific details regarding symptoms, prescriptions, etc.
Proposed revision: The proposed regulations clarify that “sufficient medical facts” to support the existence of a serious health condition may include information about symptoms, hospitalization, doctors’ visits, prescription medication, referrals for evaluation or treatment or any other regimen of continuing treatment. Additionally, the proposed regulations clarify that healthcare providers may provide information on the diagnosis of the patient’s health condition but are not required to do so in order to complete the certification form.

Current: The regulations generally prohibit contact between employers and healthcare providers.
Proposed revision: There’s an exception that permits employers to contact physicians directly if “an employee’s serious health condition may also be a disability within the meaning of the Americans with Disabilities Act (ADA).” Employers who use exception, however, must be mindful to follow the additional restrictions imposed by the ADA. An employer may also contact an employee’s healthcare provider to seek “clarification and authentication” of medical certifications.

7. Fitness for Duty Certifications
Current: The law requires that a fitness-for-duty certification must only be a “simple statement.”
Proposed revision: The DOL proposes requiring the employees to submit a certification from their healthcare providers stating that the employees are able to resume work. As a safety measure, employers are permitted to provide employees with a list of their essential job duties. This list must be provided along with the eligibility notice and must be accompanied by notification to employees that a fitness-for-duty certification is required. If such a list of essential functions is provided, the employer is permitted to require the employee’s healthcare provider to certify that the employee can perform each individual duty on the list before allowing the employee to return to work.

Site name: All About Benefits. 

URL: www.allaboutthebenefits.com/ 

Who runs it: Aetna 

What it provides: The site bills itself as a resource for people who are just out of school and trying to make healthcare-coverage decisions in the decidedly less-than-user-friendly world of health coverage. However, it can be a helpful to just about anyone who doesn’t know a lot about health coverage – the terms, the options, the pitfalls. 

The home page has five major tabs – “Let the job hunt begin,” “Budgeting for your health,” “Work it! How to enroll,” “Raise your health benefits IQ” and “School’s out forever, now what?”  

All are helpful in one way or another, but “Budgeting for your health” and “Raise your health benefits IQ” seem to have the most pertinent info. 

Budgeting for your health provides more than just how much coverage costs and how to pay for it. The page provides a dozen key questions that everyone should ask when getting health coverage. It’s not that the reader will be happy with every answer, but at least there will be fewer surprises when using coverage. 

For instance, the section suggests that you ask about the ease (or difficulty) of getting out-of-network treatment – and in fact explains in simple terms what a “network” is. 

Raise your health benefits IQ describes so-called “well” benefits, wellness, and HSAs and FSAs, among other topics. It also has a page that lists 10 common costly mistakes that people make when signing up for or using health coverage. 

Note: As mentioned, the site is a product of Aetna Corp., which of course offers health coverage. To its credit, though, the company doesn’t inundate you with appeals to sign up with Aetna, nor does it trumpet Aetna as the best choice for coverage. Yes, there are Aetna ads slapped up here and there, but they’re no more obtrusive or annoying than most Web ads (such as the ones on this site).