Increasing numbers of small companies are embracing wellness programs to curb health care costs. It appears to be paying off.
Five years ago Alexandria Extrusion Co. invited nurses, dieticians, personal trainers -- and even spiritual leaders -- onto its factory floor to help workers battle obesity, diabetes, smoking and high blood pressure.
Since then the manufacturer has ramped up its wellness program, giving gym discounts, buying bikes for workers and hosting contests with prizes to bring accountability and financial rewards to both workers and the company.
Today, it spends $100,000 a year on a broad wellness program that has lowered employee medical claims by about $1,000 per worker. About 250 of Alexandria's 300 workers take part in the program and many have since quit smoking, shed pounds and lowered blood pressure and cholesterol levels. The health improvements were enough to freeze premiums for two years.
For its efforts, Alexandria Extrusion just received two awards from HealthPartners and the 1,150-member Employers Association, now known as Trusight Inc. The burst of attention is prompting calls from other small- and medium-sized businesses in Minnesota that are trying to figure out how and where to start a wellness initiative like Alexandria's.
Wellness programs are not new -- they have long been staples at large companies such as General Mills, Medtronic and 3M. But they are less likely to be used at small firms, where Alexandria proves the exception, not the rule.
According to Mercer's 2010 national survey of employer-sponsored wellness plans, 43 percent of firms with at least 10,000 workers offer their employees some sort of wellness incentive. But only about 27 percent of firms with fewer than 500 workers offered wellness programs.
Eager to control rising health care costs, small firms are turning to each other, attorneys, insurers and trade groups for guidance.
"We are getting calls. It's kind of exciting to share our story and help others with their wellness programs," said Deb Moorman, Alexandria Extrusion's human resource supervisor. "It can be kind of overwhelming thinking where and how do we even start? It's just important to take that first step."
Mind the details
Trusight research manager Mary Frank said the organization, whose corporate members average about 200 workers, is getting lots of inquiries about how to launch a program and what the return on investment might be.
"We get questions about privacy and confidentiality and what our other members are doing. They want to make sure they are setting programs up correctly," she said.
A recent Trusight survey of 285 Minnesota companies found that most tread gingerly into the wellness arena. They host classes to help workers quit smoking (29 percent), lose weight (16 percent) or ease stress (12 percent). They change vending machine food to healthier fare or offer flu shots at work.
David Anderson, chief health officer of Eagan-based StayWell Health Management, said wellness vendors often charge $50 to $300 per worker for a program that may offer online health-risk assessments, telephone health coaching, hospital referrals and public health programs, or face time with nurses and dieticians at work.
Phone and online services are relatively inexpensive ways to educate workers about health risks. But they are less effective in changing behaviors permanently, Anderson said. Permanent changes require a bigger investment.
Some employers pay workers $75 for completing health-risk assessment forms. Others slash deductibles and premiums, or roll out contests, gift cards and prizes to workers who lower blood pressure, stop smoking or shed pounds. Whatever the tool, the goal is to get more employees engaged so spiraling health care costs can be brought under control.
Alexandria's chief operating officer, 52-year-old Al Sholtz, said his health costs stopped rising and his work wellness program added years to his life when it helped him quit smoking.
Machinist Eric Johnson lost 30 pounds and returned to a healthy blood pressure with help from nurses who took his blood, weight and blood-pressure readings monthly during "lab days" at work.
Having a full menu of wellness options sparks jealousy from friends. "They are really surprised by what they offer us here," Johnson said. "They just wish their company would try something like this."
One of the reasons they don't -- besides cost -- is complexity.
At a recent employment-law seminar, lawyers Debra Linder and Krista Hatcher from the Fredrikson & Byron law firm in Minneapolis explained how small companies can avoid missteps.
The IRS expects wellness prizes, cash and gift cards given to workers to be reported as compensation. Other rules say wellness rewards can't exceed 20 percent of employee health care premiums. Still other employment laws suggest that firms that issue prizes to employees who quit smoking would be wise to also offer those prizes to workers who complete a smoking cessation class. Not doing so may conflict with the Americans with Disabilities Act, because smoking is considered an addiction.
"This is an area where I see employers get tripped up," Linder said.
Some hop on the wellness band wagon with well-meaning contests, cash incentives, gift cards and even health screenings, only to discover later that their plans unintentionally violate medical and genetic privacy, disability, retirement or IRS rules, Hatcher and Linder said. They advise firms to first reach out to insurance companies, employee benefit pros and lawyers before venturing too far.
Moorman, from Alexandria Extrusion, said insurance broker RJF Agencies referred her company to Wellness Innovation Nursing Services in Eau Claire Wis., which provided the nurses, counselors, dieticians and trainers who visited the plant.
Alexandria also partnered with Active Living in Douglas County to win $7,500 in grants for bikes, racks and contests that had employees biking to work for a day or riding the nearby park trails during lunch.
"There's lots of help out there," Moorman said. "You just have to know where to look."
Dee DePass • 612-673-7725