Benefits November 21, 2016

How Employers Are Designing Wellness Programs

Making a physical wellness program successful starts with educating employers about their options and responsibilities, and the opportunities available to them, a report from United Benefit Advisors says.
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Most industry experts agree that employee education is the most critical component to making a wellness program successful. However, United Benefit Advisors (UBA) finds it starts with properly educating employers about their options, their responsibilities, and opportunities available to them.

For this reason, UBA has issued a report about how employers use physical wellness programs.

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UBA says many employers are unaware there are wellness options available within their current benefits package. “A basic first step that many employers are starting to provide, is incentives for employees to get their physical exam, which is often covered at 100% as part of their medical benefits,” says Les McPhearson, CEO of UBA.

The firm’s research found that 18.4% of all employers offer comprehensive wellness programs, virtually unchanged from last year. As one might expect, the highest percentage (60.3%) of plans offering wellness benefits came from employers with 1,000 or more employees. The next two largest percentages—51.1% and 35.6%—came from organizations with 500 to 999 employees and 200 to 499 employees, respectively.

Small employers with fewer than 25 employees—already the least likely to have wellness programs—have seen a 34.4% decrease in wellness program offerings in the last three years (going from 9.3% to 6.1%).

Larger employers tend to turn to independent wellness program providers versus carrier programs, with 63% of employers with 500 to more than 1,000 employees preferring independent programs. Small employers (fewer than 25 employees) overwhelmingly (more than 90%) use carrier-provided programs, likely due to their low or no cost features when bundled with the health plan.

NEXT: Incentives and EEOC regulations

According to UBA, 67.7% of employers who offer wellness programs have incentives built into the program, an increase of 8.5% from four years ago. Major lawsuits are pending against employers with particularly robust wellness programs and the regulatory environment is becoming increasingly restrictive. As a result, employers are continuing to pursue wellness programs, but they are being very cautious with program design, avoiding implementing high penalty and incentive programs.

Across all employers, slightly more (45.4%) prefer wellness incentives in the form of cash toward premiums, 401(k)s, flexible spending accounts (FSA), etc., versus health club dues and gift cards (40%). But among larger employers, 500 to more than 1,000 employees, cash incentives are more heavily preferred (63.2%) over gift certificates and health club dues (33.7%). Conversely, smaller employers (1 to 99 employees) prefer health club-related incentives (nearly 40%) versus cash (25%).

Employers are beginning to use the regulations from the Equal Employment Opportunity Commission (EEOC) as their guidelines for program development, and the wellness guide provided by the Patient Protection and Affordable Care Act (ACA) have re-empowered employers to implement premium differentials for wellness participation and cessation of tobacco use. However, many are likely wary of the EEOC’s new guidance regarding wellness programs that include health risk assessments, biometric screenings, and medical exams. How those regulations influence plan design remains to be seen.

NEXT: Wellness program design

Among employers offering wellness programs, 72.5% include health risk assessments, 67.7% offer employee incentives for participation, 67% offer biometric screenings or physical exams, 54.6% include on-site or telephone coaching for high-risk employees and 38.8% include seminars or workshops. The use of health risk assessments continues to decrease, dropping 10.5% in three years. Compared to 2015, telephone coaching for high-risk employees is up 7.5% and seminars and workshops are down 8.5%.

Sierra Sullivan, assistant population health strategist at LHD Benefit Advisors, a UBA partner firm, says, “Including a biometric screening or physical exam as part of a comprehensive wellness program can be beneficial for both the employer and employees. Through a biometric screening or physical exam, key health indicators related to chronic disease can be measured and tracked over time, including blood pressure, cholesterol levels, blood sugar, or body mass index (BMI). For employees, this type of data can provide real insight into current or potential health risks and provide motivation to engage in programs or resources available through the wellness program. Beyond that, aggregate data collected from these types of screenings can help employers make informed decisions about the type of wellness programs that will provide the greatest value to their company, both from a population health and financial perspective.”

UBA’s research found that for those identified as high risk or diagnosed with a chronic condition, wearable devices have proven useful in managing ongoing care. According to Kaycee Eaton, assistant population health strategist for LHD Benefit Advisors, “Wearable devices provide real-time data and promote self-management for chronic conditions. Self-monitoring blood glucose meters and blood pressure monitors have been around for a while, but with the ability for the data to automatically upload to a smartphone app or website, it can help drive health outcomes. These programs can provide instant feedback, track patterns, show progress, and can be easily shared with a health care provider.”

More results and information about the survey may be found here.

Participants November 21, 2016

All Generations Struggling to Meet Retirement Goals

A survey reveals motivations to get retirement plan participants to save more.
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Millennials, more so than other generations, grasp the importance of retirement savings, a survey by Natixis Global Asset Management found.

Sixty-nine percent of Millennials, compared to 55% of Baby Boomers, think workers should be required to save for retirement. Eighty-two percent of Millennials, versus 77% of Generation X, think employers should be required to offer retirement plans. Seventy-six percent of Millennials, compared to 66% of Boomers, think companies should offer matching funds, and 84% of Millennials want investment options that reflect their personal values.

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Millennials began saving for retirement, on average, at age 23, while Gen Xers didn’t start until age 27 and Boomers at 31. While 81% of Boomers are counting on Social Security, only 55% of Millennials think it will still be in existence by the time they retire.

Sixty percent of the 951 workers that Natixis surveyed said they have figured out how much they will need in retirement. Boomers think they will need an average of $934,677 and are 34% on the way there ($317,790). Gen Xers say they will need $810,387 and have 24% of their target saved ($194,492), and Millennials have a target of $869,662 but have only 8% of this saved ($69,573).

Forty-one percent of workers save less than 5% of their salaries, and 28% have taken out a withdrawal from their retirement savings. Among Millennials, withdrawals jump to 43%.

“Younger workers in particular are grappling with a different set of retirement challenges, compared to previous generations,” says Ed Farrington, executive vice president for retirement strategies at Natixis. “Their retirement savings strategies are encumbered by a number of factors such as student loan debt, a lack of company pensions and a sense of doubt that Social Security will be a source of income in retirement. Employers would do well to focus on designing comprehensive plans that offer greater incentives and a better range of investment choice that especially appeal to this large portion of the workforce.”

NEXT: How many aren’t participating?
The survey found that 31% are not participating in their employer’s retirement plan. The No. 1 reason they give as to why is that their employer is not offering enough of a match, or no match at all (48%). Thirty-five percent said it is due to rising health care costs, and 20% said it is because they are saving for their child’s education. Thirty-three percent of Millennials said student loan debt is an impediment.

Among the 69% who are participating in their retirement plan, 63% say it is because of the company match, 56% cite the tax incentives, and 52% point to the automatic deductions from their paycheck. Sixty-nine percent say they would contribute more if their employer boosted their match.

Workers who have received financial advice have, on average, 10% more saved than those who did not. Seventeen percent said they would save more if they had access to financial advice. However, only 30% of the workers surveyed said their employer offers financial advice.

Eighty-seven percent said they would save more if they were permitted to participate in their company’s retirement plan from the first day they started working there. Twenty-three percent said they would be incentivized to save more if their plan automatically escalated their contributions.

Forty-five percent said they did not know how much they will need for retirement. Natixis says that financial education is obviously needed, as only 55% correctly answered a question about compounding interest.

CoreData conducted the survey for Natixis in August and September.

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