Health and well-being is something individuals must improve upon 24/7/365. As such, successful employee wellness programs must assist employees in thinking about and improving their health and well-being throughout each and every day. This is one reason why programs that only offer or require a health risk assessment and/or biometric screening do not deliver results – employee health cannot be improved through a once a year activity.
The best way for employers to address these challenges is by replacing one-time wellness events of little to no value with a continuous program that rewards employees for being healthy every day. Although wellness challenges are often thought of as a 6-week step program each summer, they can be designed to be continuous programs that reward healthy behavior every day and assist in creating healthy and repeatable habits. Wellable delivered a webinar discussing best practices in designing these programs as well as a review of real-life, successful Wellable client programs. Although the webinar discussed potential reward or incentive options, below is a list of some Wellable favorites and pros and cons for each one. It is not an exhaustive list and, since human resource teams have the best pulse on the cultures on their company's cultures, it is encouraged that they think creatively about what may work best for them.
Health Savings Account (HSA)
A HSA is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan (HDHP). Employees can use the dollars in their HSA to pay for medical expenses and offset the high deductible associated with their health insurance. It is also an attractive retirement vehicle that promotes financial wellness because employees can treat the funds as a tax-free retirement account, similar to an individual retirement account (IRA). HSA funds also rollover from year-to-year and can move with the employee to a different company, giving control to the employee and thereby improving their financial security. Lastly, employees can contribute funds on their own to their HSA which provides even more control in their financial future.
Wellable is a huge fan of HSA contributions as part of a continuous incentive wellness challenge because of the financial wellness it provides employees. The webinar referenced earlier walked through a detailed case study of how HSA Health Plan, a Wellable client, uses HSA dollars as part of their program. HSAs can be limiting, however, because it does require a potentially larger budget and is only available to employees with HDHPs.
Health Reimbursement Arrangement (HRA)
This is not to be confused with the common Wellable Blog topic of health risk assessments, which are also known by a similar acronym. HRAs are an IRS-approved, employer-funded, tax-advantaged employer health benefit plan that reimburses employees for out-of-pocket medical expenses and individual health insurance premiums. Employers can make contributions to an employee's HRA account, and the employee can use the funds to reimburse them for eligible expenses. Unlike HSAs, HRAs are notional arrangements, which mean employers do not need to incur expenses until reimbursements are made on approved medical expenses. Also, HRA balances may or may not rollover from month to month or year to year, depending on program design, and employees do not get to take the funds with them if they change employers.
The distinction between HRAs and HSAs may make HRAs more or less attractive for certain continuous incentive wellness challenges. Most notably, not having to incur expenses until reimbursements are made and having employees forfeit funds if they decide to move to another company make HRAs more attractive to budget-conscious companies. Also, companies that do not have high-deductible health insurance cannot offer HSAs, which make HRAs a natural alternative for groups with more traditional insurance plans. Either way, HRA dollars are a great way for employees to earn rewards that can be reinvested back into their health and make the cost impact of their health plan less significant. One downside is that the lack of control and no guarantee of rollover makes HRAs less useful in improving employee financial wellness and helping with retirement.
401(k) plans are the retirement plans of choice in the modern era with nearly all companies with more than 100 employees offering them. Despite the tax benefits and potential matching programs from employers, two-thirds of Americans do not utilize this retirement option.
A key benefit to linking a 401(k) plan with a continuous incentive wellness challenge is the ability to promote usage of a heavily underutilized benefit as well as having the program reward directly promote financial wellness, which is a particularly important topic amongst employers today. For those employers who offer matching programs, there is a unique opportunity to incorporate the matching program with a wellness challenge. When done correctly, this will alleviate much or all of the budget constraints that may present themselves during program design.
Similar to 401(k) plans, the benefits of vacation are significant but underutilized in the workforce. As a result, employers would be wise to encourage employees to take vacations and disconnect from the stressors of their work environment and daily lives. This is where SuiteBreak comes in. SuiteBreak allows employers to award travel credits as part of a continuous incentive wellness challenge. The credits take dollar-for-dollar off the online rate at more than 700,000 destinations worldwide, which brings the cost to the lowest possible wholesale rate.
SuiteBreak is a great reward option for two reasons. First, it promotes employees to take vacations, which few wellness programs do despite the evidence suggesting it delivers the health benefits that are sought. Second, SuiteBreak gives employers a significant bang for their buck. For only couple of dollars per employee per month, employers can award up to $1,000 in travel credits per employee! Also, these rewards are not taxable and work equally well with employees regardless of their location, including international populations.
Paid Time Off (PTO)
Sometimes cost isn’t the only barrier to getting employees to take vacation. Employees also need the vacation days to take time off. The webinar on continuous incentive wellness programs highlighted a case study of an employer who used PTO as part of their program to drive wellness success at their organization. The major benefit of using PTO in a program is that it is a non-cash expense (although it does need to get accrued on the balance sheet) and delivers the health benefits noted in the SuiteBreak option. The downside is that it is not an option for employers with unlimited vacation, which is becoming more common, and employees who do not use all of their vacation days might not find it appealing. In regard to the latter, this is a problem employers should address regardless of their wellness program.
This one is obvious, but it is a popular choice and does catalyze program participation. The benefit of cash or gift cards is that they deliver a direct impact in that someone can use it immediately, which may be a better short-term motivator. It also gives employees the ability to use it on whatever they like, including many of the options above.
All of the options above have pro and cons for both the employee and employer. In regard to best options for employees, it all depends on the individual. Some employees will be motivated by HSA contributions and others prefer PTO. This is why the best practice for an employer would be to support multiple options for rewards and let the employee choose what makes the most sense for them. For example, an employee could choose a large travel credit from SuiteBreak compared to a smaller amount of cash. It all depends on the personal preference, which may change so allowing employees to switch between options is also important.