Worksite Wellness Programs: Why Workers’ Comp Insurers and Small Businesses Should Team Up

By Robin E. Kobayashi, J.D., LexisNexis Legal & Professional Operations

Small businesses employ 56 percent of the U.S. workforce. They get pounded each year with the high costs of doing business, and they often lack the financial resources, staffing, expertise, management buy-in, or motivation to help reduce some of those costs by implementing a worksite wellness program.

Consequently, small businesses should perk up their ears about a hot-off-the-press study in the Journal of Occupational and Environmental Medicine, in which Pinnacol Assurance, a workers’ comp insurer in Colorado, teamed up with 260 small businesses to help them implement worksite wellness programs. This study was unique because a workers’ comp insurer, and not a health insurer, helped small businesses—at no cost—set up a workplace wellness program and provided continuous guidance on design and execution of the program.

What does this study mean for small businesses across the nation? It could mean that an alternative model exists where a “plug-and-play” type of workplace wellness program developed by a workers’ comp insurer could succeed when targeting small businesses.

Definition of Small Business

For the purposes of the study in question a small business had less than 500 employees and no more than $7 million in average annual receipts.

How the Study Was Set Up

The study examined, for a period of five years, Pinnacol Assurance’s “health risk management” (HRM) program, which was offered for free to 55,000 policyholders, 99.6 percent of whom were located in Colorado. The Pinnacol Assurance leadership reasoned that “poor health has a negative effect on workers’ compensation costs” and that “health risk management will become as fundamental to managing risks as safety management is currently.”

The HRM program was voluntary. Pinnacol Assurance and insurance agents actively recruited employers to participate. Employers also self-enrolled. In the end, a total of 260 small businesses enrolled in the HRM program. These businesses came from a range of economic sectors.

Goals of the HRM (Workplace Wellness) Program

The goals of the program aligned with the goals of the small businesses which participated in the program:

1.    Improve employees’ healthy behaviors
2.    Reduce workers’ comp rates and costs
3.    Enhance work productivity

Key Facts and Findings

The study is a workplace-wellness bonanza of interesting facts and findings that illustrate “opportunities to address important modifiable health risks in the small business workforce”:

·    The business size of the 260 employers studied ranged from fewer than 10 employees to more than 250 employees; the majority (53.4%) had fewer than 50 employees
·    The vast majority (70%) were located in the urban “Front Range” of Colorado
·    71% remained in the HRM program after 1 year, with 82% of that number remaining in the program through the end of the second year
·    Small businesses participating in the program definitely wanted more on-site support for implementing and maintaining the program
·    6,507 employees at these 260 small businesses enrolled in the HRM program and completed a baseline questionnaire.

o   The mean age was 41.4 (plus or minus 13 years)
o   74.3% were married
o   80.6% were white
o   55.7% were male
o   86.2% were full-time employees
o   41.7% had completed a 4-year college degree
o   75.3% had some education beyond high school
o   24.9% had an annual income of less than $25,000
o   65.8% had an annual income of less than $50,000
o   The average “overall wellness score” (OWS) was 66.7, plus or minus 13.3, falling into the “doing well” category (60 to 79 score)
o   38.9% were normal weight, 34.3% were overweight, 25.6% were obese
o   Less than 17% smoked cigarettes
o   No data was available for marijuana or illicit drugs
o   81.7% of females consumed 7 or fewer servings of alcohol per week
o   More than 98% of males consumed 14 or fewer servings of alcohol per week
o   62% exercised at least 3 times per week
o   82.1% ate at least 3 servings of fruit or vegetables daily
o   53.7% reported 7 or more hours of sleep each day
o   71.5% reported moderate or high stress in their work, home life, or finances
o   Common health conditions and risk factors reported by employees were overweight (37.8%), seasonal allergies (34.8%), depression (22%), chronic fatigue (20.4%), chronic sleeping problems (18.4%), headaches (17.2%), arthritis (16.3%), high cholesterol (15.7%), hypertension (15.3%)
o   Chronic and long-term health conditions included: diabetes (3.8%); cancer (3.3%); osteoporosis (2.9%); coronary heart disease (1.7%); chronic lung disease (0.7%)

Limitations of Study

The study attempted to answer the question of whether it was feasible to target small businesses to offer a workplace wellness program to its employees. It was beyond the scope of the study to determine whether health risk reductions would reduce workers’ comp claims and costs.

In addition, the authors of the study were unable to determine the rate of small business adoption.

The study didn’t undertake to examine the factors affecting employee participation. Nor did the study know which incentives each of the small businesses used to encourage employee participation. So the study wasn’t able to pinpoint any “healthy worker bias” among the participating employees. Given the possibility of a healthy worker bias in those employees participating in the program, it raises the question of just how bad the health risks and chronic illnesses could be for the entire population of employees working for small businesses.

Still…A Big First Step

This initial study shows that the barriers for small businesses to implement a workplace wellness program can be overcome. As the authors of this study point out, we need further studies that show exactly how a workplace wellness program can address health risks in employees, workers’ compensation costs, and employee loss of productivity due to illness or injury.

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