Smaller companies want workers to shape up

Feb. 29, 2012 at 7:54 AM ET

A growing number of small business owners are taking a page from their bigger corporate counterparts and implementing wellness programs for their employees to curtail ever-escalating health care costs. Employers can’t just force everyone to eat tofu and do yoga, however.

That’s why Climax Portable Machine Tools based in Newberg, Ore., is taking its time rolling out a wellness program and using a carrot instead of a stick with its 160 employees. The program implemented in the last year is voluntary. Workers are offered incentives, including getting up to $40 back in their paychecks a month, for getting on the health bandwagon. Among the steps being offered are on-site medical screenings, health and nutritional seminars, daily walks and even a company basketball team.

Climax has seen its health insurance premiums rise as much as 30 percent annually, so a wellness program made sense, said Karen Kinslow, the company’s wellness coordinator. “We really wanted to look after our employees and it really helps the bottom line when you do these things,” she explained.

More small business owners are realizing the same thing. A recent MetLife survey found 29 percent of small businesses offered some sort of wellness options, compared to 22 percent last year, and 16 percent five years ago.

Such programs have been shown to pay off for employers. Research from the Partnership for Prevention found that for every $1 spent on worksite health promotion programs, a company can see an average of $3.50 in savings related to fewer sick days and health care costs.  And such programs can be a good thing for employees. An Israeli study showed that employees who engaged in some form of exercise had lower rates of depression and job burnout, according to an article in MyHealthNewsDaily.

But the strong-arm approach to getting workers healthier can run afoul of the nation’s labor laws, including the Americans with Disabilities Act, or ADA. Implementing employee health programs come with many restrictions under several key laws – the ADA, the Genetic Information Nondiscrimination Act (GINA), and the Health Insurance Portability and Accountability Act (HIPAA).

Under the ADA, employers are prohibited from requiring an employee to take a medical exam, and you can’t require an employee to participate in a wellness program to qualify for health insurance, said Chris Kuczynski, assistant legal counsel, ADA/GINA policy division for the Equal Employment Opportunity Commission.

When it comes to GINA, he continued, “If you’re going to offer an incentive in connection with a health risk assessment or wellness program, you can’t condition that on whether a person gives you family history or genetic information.”

Employers can’t have blanket wellness policies, which is where companies get into the most trouble, Kuczynski stressed. If a worker is unable to engage in certain exercises because of an underlying medical condition that is beyond his control, such as a thyroid gland disorder or high blood pressure, employers can’t penalize the employee for not participating.

Climax has been cautious when implementing methods to encourage workers to participate.

Kinslow talks to workers individually and helps them come up with other options if they can’t do things like running a 5K. Employees can get points, which translate into dollars, if they attend nutrition or stress-reduction seminars on-site, or even if they take a healthy-eating cooking class. And, she added, some employees may not want their wellness tied directly to work, so they could get points for teaching a karate class to kids, for example.

When providing rewards there are limits, especially as they relate to health insurance premiums. Companies are increasingly offering employees breaks on their healthcare premiums as incentives to participate in wellness programs, but there are strict requirements under HIPAA on how that can be done. The total award must not exceed 20 percent of an employees total coverage cost. Under a provision in health care reform that number will go up to 30 percent in 2014.

As far as medical privacy restrictions, health screenings that are done by the employer must be strictly confidential. “They always have to be careful with where data goes and their access to that data,” said Joe Ellis, senior vice president at CBIZ Benefits & Insurance Services, an employee benefits consulting firm. “The employer would never see an individual’s data but they could see aggregate data.”

Another problem is potential injuries workers could sustain while exercising during work hours.

Late last year, Ged King, president of The Sales Factory, a marketing agency in Greensboro, N.C., bought four Trek commuter bicycles for employees to use on lunch runs, errands or leisurely rides.

The bikes are part of a wellness strategy King devised to help his staff of 27 get healthier.

His plan also includes rewarding workers prizes -- everything from $25 gift cards to iPods -- if they exercise more, including biking, running, or even gardening. “It makes for happier people who are more excited to come to work,” he said about the wellness program that launched last month. “You can’t be creative if you don’t feel good.”

To deal with the issue of injuries, employees at The Sales Factory were all asked to sign a “Bicycle Release Form” before King purchased the bikes. The release stated that workers were assuming “all personal liability in case of injury”.

Employees were also asked to promise to wear helmets, which he provided, when they take the bikes out. The goal of the wellness plan, King stressed, “is to make sure we’re healthier.”