Both the public and private sector took initial steps last week to test the concept that keeping employees healthy will save money on healthcare.
In Washington, two senators have introduced a bill that will encourage businesses, through the use of tax credits, to implement comprehensive workplace wellness programs.
Within a day of that announcement, the Midwest Business Group on Health announced a partnership with a vendor to provide administration for incentive programs for companies that belong to the group.
Both announcements lend support to the trend of employers providing more health and wellness support for employees in an effort to reduce healthcare expenditures. Last month, results of a survey sponsored by the ERISA Industry Committee found increasing implementation of health and disease management programs by employers.
The proposed legislation, the Healthy Workforce Act of 2007, is being co-sponsored by Sen. Tom Harkin (D-Iowa) and Sen. Gordon Smith (R-Ore.). It would provide tax incentives to businesses, particularly small and medium-sized employers, that provide opportunities for employees to lead healthier lives and prevent chronic illnesses.
The act would provide a tax credit of as much as $200 per employee for the first 200 employees, and as much as $100 per each additional employee to businesses that offer comprehensive wellness programs that include three of the following categories: health awareness programs; behavioral change programs; a supportive environment to encourage participation in wellness programs; and an employee engagement committee to tailor the wellness program to the needs of a company's workforce.
In touting the proposal, Harkin said employer spending on health promotion and chronic disease prevention is a good investment. "Studies have reported a proven rate of return ranging from $2 to $10 for each dollar invested," he said. "Workplace wellness programs also are economical, averaging $30 to $200 per employee."
Groups including the American Medical Association, the Disease Management Association and the American Hospital Association provided instant support for the proposal.
"The legislation rightly joins employers, health providers and Americans together to fight chronic disease and foster healthier lifestyles," said AHA Executive Vice President Rick Pollack.
The Midwest Business Group on Health signed an agreement with IncentOne of Lyndhurst, N.J., under which IncentOne will offer health and wellness incentive programs to more than two million employees at 80 MBGH-member companies.
The effort to find a preferred company to operate health and wellness incentive programs is in part a response to members' interests, said Larry Boress, president and CEO of the business group.
"I think it will be a fundamental strategy that will evolve and be part of employer programs for a long time," he said. Employers are beginning to tie employees' health and wellness activities to reductions in insurance premiums, he added.
"Over time, the question is, how do you incentivize people?" Boress said.