Well-being 2.0: Employers Sharpen Focus on Workforce Health

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Well-being 2.0: Employers Sharpen Focus on Workforce Health
Calendar19 December 2014

As the ACA creates more standardization of medical benefits, employers who want to differentiate themselves as great places to work are sharpening their focus on workforce health — and changing their thinking on how to get there. In just the past few years, changes in the market, in technology, and in employee attitudes — combined with what we learned from past efforts — are pointing the way to a wellness program that may look very different from the standard program today.

This new approach goes beyond what we define as wellness. It captures the essence of what drives success both inside and outside the workplace. It is well-being. This term encompasses physical, emotional and financial health. The dimensions of well-being are interrelated, and by solving for the whole rather than any one of them, an employer can maximize the performance of the current and future workforce.

The need to manage cost in the post-reform era — with enrollment rising and the excise tax on high-cost plans looming — has accelerated the trend toward consumerism. As employers ask workers to take more responsibility for their health spending, they need to give them the tools to succeed. While the concept gets much lip-service, creating a culture that supports employee well-being requires real change management, from the CEO on down. It’s an initiative that cuts across business functions, policies, and programs, and requires the support of all HR and business leaders as well as marketing and public relations resources. The success of any one program aimed at improving employee well-being will be limited by the extent to which a healthy climate exists within the organization.

The ACA supports the use of financial incentives to reward nontobacco use and health status. But incentives are only one way to promote behavior change, and may not be the most effective way. Behavioral economics provide important insights into why and how people do what they do. Consider that the size of the incentive matters far less than how it is framed and messaged. For example, research has shown that a relatively modest financial incentive delivered in the form of a gift card or lottery ticket is more effective than a bigger incentive hidden inside the paycheck. Game mechanics motivate by tapping into the desire to win without any financial incentives.

Taking a broader view of the value of employee well-being makes it clear why employers will need to stay involved with employee well-being, whether they continue to administer an employee health plan, shift to a private benefit exchange, or even exit health plan sponsorship entirely.

When employees thrive, businesses win. It’s that simple.

Mercer has assembled a panel of experts to reflect on key health care reform developments and share their expectations for the future. Susan Connolly is a Partner in Mercer’s Employee Health & Benefits business and US Leader of the Total Health Management Specialty Practice.

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