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Health Care Bill Pushes Employers to Promote 'Wellness’ Among Workers

Tuesday, August 11, 2009 By Fred Lucas, Staff Writer, CBS News

A provision in the Senate version of the health-care reform bill would push private employers to create a “culture of health” for employees in the workplace.   While many employers already have wellness programs that include onsite clinics, and programs for reducing obesity and encouraging exercise as a means of lowering health care costs, these programs are private-sector initiatives—between an employers and workers—and the government is not involved.

That could change if the language in the version of the health care bill drafted by the Senate Health, Education, Labor and Pensions Committee is adopted.  The bill would create tax incentives for employers to create worker “wellness” programs and directs the Centers for Disease Control and Prevention (CDC) to evaluate employers for the effectiveness of the wellness programs they offer.  The findings from these evaluation will be reported to Congress. 

Getting the government involved in pushing employers to promote “wellness” among their workers could undermine something that is already being done successfully by the private sector, said Devon Herrick, senior fellow for the National Center for Policy Analysis, a free-market think tank. “Employers are free to offer plans now and experiment with what works,” Herrick told “This would stifle experimentation. An employer’s wellness plan may not be designed to meet the specifications of the bureaucrats at the CDC.”

The Affordable Health Choices Act, approved by the Senate HELP Committee, includes a “workplace wellness marketing campaign.” President Barack Obama and supporters believe this will lead to a healthier workforce thus lower costs for business. Critics argue it amounts to an unfunded mandate on businesses. The bill expands the amount that employers can reward employees for participating in wellness programs from a 20-percent to 30-percent premium discount.

The legislation also says, “The director of the Centers for Disease Control and Prevention in coordination with relevant worksite health promotion organizations, state and local health departments, and academic institutions, shall conduct targeted educational campaigns to:

  1. make employers, employers groups and other interested parties aware of the benefits of employer-based wellness,
  2. establish a culture of health by emphasizing health promotion and disease prevention;
  3. emphasize an integrated and coordinated approach to workplace wellness; and
  4. ensure informed decisions through high quality information to organizational leaders.” The provision can be found starting on page 417 of the Senate bill.

Sen. Tom Harkin (D-Iowa), a senior member of the Senate health panel, was a major advocate of numerous prevention measures in the bill, including the workplace wellness provision.

Chronic illness affects more than one-third of working Americans and the costs associated with chronic disease account for approximately 75 percent of the nation’s annual health care costs, Harkin spokeswoman Bergen Kenny told She added that employer medical costs jumped 72 percent from 2000 to 2006. “Sen. Harkin’s workplace wellness program simply provides tax incentives for companies who offer programs to encourage their employees to adopt healthy lifestyles,” Kenny continued. “Businesses can receive the tax credit for 10 years for establishing new qualified wellness programs, which include nutrition, smoking cessation and stress management courses.”

Studies have reported a proven rate of return on investment within 12 to 18 months, ranging from $2 to $10 for each dollar invested, Kenny added. “Sen. Harkin believes that the federal government can and should use tax incentives to improve our public health and lower the cost of health care,” Kenny continued.

However, some of these provisions amounts to mandates on business, Sen. Mike Enzi (R-Wyo.) fears. Enzi, the ranking Republican on the HELP Committee would prefer to see wellness programs done voluntarily, similar to those enacted by the Safeway, a Washington, D.C. area grocery store chain. “He wanted to avoid creating new mandates,” Enzi spokesman Craig Orfield told

 “It has been an issue and one that Sen. Enzi has tried to make more conducive and offer incentives for companies to do their own model, like Safeway.” More than 74 percent of the 30,000 nonunion Safeway employees signed up for Safeway’s “Healthy Measures” program to undergo screenings for cholesterol, blood pressure and weight control to lower their health premiums. The company also offers gym membership discounts.

The firm saw its health care costs go down by 13 percent in 2006, while employees have saved about 20 percent on individual premiums. Although the legislation does not mandate that employers participate in the program, it calls for “developing standardized measures that assess policy, environmental and systems changes necessary to have a positive health impact on employees’ health behaviors, health outcomes, and health care expenditures; and evaluating such programs as they relate to changes in the health status of employees, the absenteeism of employees, the productivity of employees, the rate of workplace injury, and the medical costs incurred by employees.”

The legislation also calls for “training employers on how to evaluate employer-based wellness programs by ensuring evaluation resources, technical assistance, and consultation are available to workplace staff as needed through such mechanisms as web portals, call centers, or other means.” Also, the CDC would “conduct national worksite health policies and programs survey to assess employer based health policies and programs,” then report those findings to Congress.

This will translate into bureaucratic oversight with a new layer of bureaucracy,” Orfield said. Pitney Bowes, a business solutions company, offers cash incentives such as a $100 Visa gift card to employees to take health courses. It also offers a grand prize drawing for free health coverage each year, according to corporate information provided by the company to When the company expanded its drug coverage in 2001, insurance costs fell.  Meanwhile, last year, 75 percent of the employees used onsite clinics and pharmacies, which led to declining hospitalization rates, according to the company.

One of the older corporate wellness programs was established by Johnson & Johnson, a health products company that in 1979 began to focus on the health of employees. “Our healthcare claims have been below per capita and trend benchmarks, and for the past ten years, they have consistently been one to two percent below the benchmark. Our cumulative savings over the ten-year period exceeds $250 million,” Johnson & Johnson spokeswoman Carol Goodrich told in an e-mail statement. “Through a combination of programs that includes a health risk assessment, lifestyle and disease management counseling, risk intervention programs, and financial incentives, we have surpassed our goals in three of the major modifiable risk categories - smoking, blood pressure and cholesterol,” Goodrich continued. “We've seen a 66 percent drop in tobacco use over time, for example, and reported a rate of smoking at 4 percent for 2007 compared with a national target of 12 percent by 2010.”

The fastest growing cost on companies is health insurance, causing the number of businesses offering health insurance to decline from 69 percent to 60 percent between 2000 and 2005, according to the U.S. Workplace Wellness Alliance (USWWA), an advocacy group promoting employer-based wellness programs. The organization also states that $3.50 are saved for every $1 spent on workplace wellness, as well as an average 27 percent reduction in sick leave absenteeism and an average 32 percent reduction in worker’s compensation costs.

But the legislation is counterproductive to many of the prevention goals, including workplace wellness, jogging and biking trails and community health boards, said Herrick of the National Center for Policy Analysis. “If you do away with a penalty for preexisting condition, even if you don’t mean for it to, it has the effect of lowering incentives for healthy habits,” Herrick said. “There is a Big Brother aspect to the wellness provisions. We all know what we can do to improve our health. We know that fast food is not as good as the salad bar. We know walking is better than watching TV. I don’t think creating jogging paths and empowering the CDC to set standards will improve anything. The new jogging paths will help people who are already healthy.”

The problem, according to the Senate Republican Policy Committee, is that too much federal regulation creates barriers to employers establishing a wellness program. A study by the Republican Policy committee said Internal Revenue Service rules would tax employee incentives such as plane tickets or IPods that some employers award employees who meet certain health goals.

In May, President Obama hosted executives from Johnson & Johnson, the Hotel Employees and Restaurant Employees International Union, Microsoft, the Ohio Department of Health, Pitney Bowes, REI and Safeway at a White House event promoting workplace wellness. The president directed the White House Office of Personnel Management, which oversees all federal employees, to work with the White House Office of Health Reform, the National Economic Council, the Department of Labor and the Office of Management and Budget to examine successful program and look at implementing such a program for federal employees.