HEALTH BENEFITS

Health Benefits



Executive Summary

The nature of work has changed dramatically from industrialization to a more knowledge-based economy over the last half century. Keeping workforce happy and healthy is still a principle. In the 1940s and '50s, companies encouraged social clubs and organized outings and picnics. By the '70s and '80s, however, the strategy had shifted to individual fitness and smoking-cessation programs. In the '90s, workplace spirituality motivational speakers and on-site yoga became popular. Today, the hottest trend is capitalizing on a little bit of them all under “workplace wellness”. The main reason behind this is that the average American spends more than half of his or her waking hours at work-and half say they frequently work on evenings and weekends. Days lost to illness or disability, meanwhile, have climbed each year since 2000, according to Bureau of Labor Statistics, when a wave of downsizing began and those who still had jobs were forced to work longer hours with fewer resources. More than half of the Fortune 500 downsized in the 1990s reported that productivity deteriorated as a result. If companies value their employees as key assets, it is essential they encourage them to stay mentally and physically healthy.( Becker, 2005)



Health Benefits

Introduction

Enrollment in a group usually occurs when an employee first begins work or during a specified period called "Open Enrollment" when employees can switch health plans if their employer offers more than one option. Open enrollment generally happens once a year, although Medicare allows switching each month. Sometimes employees are allowed to change plans at a time other than open enrollment in the event of a major change such as marriage, divorce, birth of a child, or death.( Becker, 2005)

Discussion

Fitness centers play an important role in the wellness program. Employees who are physically fit have less absenteeism, perform better on the job and file fewer health insurance claims. Employers with onsite fitness centers find that they are spending less for healthcare coverage. Research shows that company morale tends to stay high because healthier employees are happier employees14. The below diagram summarizes the benefit and consequence of offering an onsite health/fitness center. Further commentary from academic research follows. (Parchman, 2003)

An intensive study conducted for Johnson & Johnson by the Medstat Group showed that participating employees have dramatically lowered medical expenses and realized overall improvements in several health risk categories, including high cholesterol, hypertension, and cigarette smoking. According to this study, medical care cost savings amounted to $225 per employee annually. The saving derived from reductions in hospital admissions, mental health visits, and outpatient service use. Savings increased in the program's third and fourth years. J&J saved an average of $8.5 million annually for the same four-year period after the program began, mostly because of lower administrative and medical utilization costs15. Moreover, another study showed that this program reduced its hospital costs by a third and its absenteeism rate by 18 percent during the first five years of its health promotion ...