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It’s Open Enrollment: What are CFO’s doing this year?

Saving money on healthcare costs doesn’t have to be expensive
by Susan A. Emery, President
Companies from small business to large corporations are strapped with the challenge of healthcare costs.  The latest insurance products don’t seem to be working.  They are still faced with double digit increases every year and they striped the employees’ benefit packages more than they would have liked, already.    So now they may be thinking of developing a wellness plan.  But they all seem to cost more than what they may save.  You’re trying to cut costs not increase them.  Many CFO’s continue to are now looking outside their health plan for solutions. CFO magazine’s latest survey shows that 70% of CFOs top priority in 2012 is to control healthcare costs.  Second is to minimize the impact of rising costs, followed closely by reducing the cost of benefits. They understand that healthy, productive employees cost less.  But how they go about helping them become healthy may be a bit different that the traditional wellness plan.

Voluntary benefits (VB) are a CFO’s best kept secret – kept even from them.  Not only do VB lower the bottom line immediately but they are very important component of a successful, sustainable wellness program.  A good wellness program doesn’t have to be expensive. It just needs to contain certain components, which I will discuss in another article at a different time.  My point is voluntary benefits fill in the gaps of the medical and dental plans that have been slowly eroded over the years to reduce costs.  The very erosion of those benefits have impacted the health of our employees.  We know there are certain levels, in which,  people will just stop going to the doctor and getting treatment, sometimes causing an unexpected impact to the company’s bottom line in the form of sick employees. Vicious cycle.

It is understood that helping our employees become healthy makes good business sense.  Not only do we lower health and insurance costs (health, workers comp and disability), but we also increase productivity.  Reducing  last minute call ins, turn over (training, shared work time) and the employee that comes to work over stressed or sick, saves and creates money. However, we have been told time and time again that we have to purchase “plans” that give employee incentive to lose weight, lower cholesterol and stop smoking.   There are several components to a wellness program;  health audits focused on the current health of the employee and there are benefit plan designs that help the employees’ pay for the services that will keep them healthy, maintain conditions and lower stress.  Many times these are services and coverages’ employees would like to have but just cannot or do not plan for them.  Things like accidents, surgeries and critical illness.  We all know these situations can happen, but with the economy and everyone cutting back employees just are not able.  Voluntary benefits are parts within these components.  Not only do they allow employees to maintain some vital programs that allow them to fund their wellbeing, but it creates some of the benefit plan structure essential for a successful wellness program.
Voluntary benefits are known to increase employee morale by offering employees a more diversified benefit package as well as access to coverages they would not be able to purchase on their own.

Survey: 3 in 4 small business owners tout health and wellness programs

While most small businesses don’t offer health and wellness programs to their employees, three of four that offer such programs find the initiatives positively impact their bottom line.

That’s one of the key conclusions of a study of more than 1,000 small-business owners by Humana Inc. (NYSE: HUM), Louisville, Ky., and the National Small Business Administration (NSBA), Washington, D.C. Conducted by the research firm StrategyOne, New York, the study aims to uncover health and wellness needs and barriers facing small businesses in today’s post-recession business recovery.

The survey defines health and wellness programs as initiatives designed encouraging employees to make healthier choices such as getting preventative care, eating right and exercising.

More than 9 in 10 (93 percent) of the study’s respondents consider their employees’ physical and mental health to be important to their financial results, but only one-third express confidence in their ability to help employees manage their well-being.

More than half of the people surveyed maintain that insufficient information is available that pertains to small businesses introducing health and wellness programs. Among companies less than 10 years old, more than six in 10 (63 percent) having already adopted health and wellness programs.

A key factor in small business owners’ decision about whether or not to introduce a health and wellness program rests with employee interest, the study indicates, adding that:

● Startups find their employees, many of them younger, prefer and pursue such offerings.

● 85 percent of startups say wellness programs are worth the investment and 63 percent are already adopting such programs.

● Most startups say these programs aid in recruiting and retaining employees.

While often focused on physical health, well-being programs can impact mental health too, the study notes, adding that:

● High employee stress is the number one concern for small business decision-makers, especially those at smaller companies, with stress levels more than triple other employee well-being concerns.

● Understanding this issue and incorporating stress-management into wellness offerings will be an important consideration for small business owners moving forward.

● 67 percent of respondents say offering programs that help keep employees healthy would be the best health-related option received by employees, versus only 17 percent who say allocating more sick days.

Open Enrollment

What are CFO’s doing this year?

Survey: 3in4 Small Business Tout Health and Wellness