Filed Under:Risk Management, Loss Control

Workers' Comp best practices: Four steps to employee wellness

In any business, employees are strategic investments. Here's how to protect those investments.
In any business, employees are strategic investments. Here's how to protect those investments.

Employees are strategic investments, and critical components of every business. Recognizing the value of their associate teams, more and more employers are opting to invest in employee wellness programs and initiatives. Employers who are focused on wellness benefit from the reduction in both the health and financial risk employees have on their organization.

There are multiple factors employers should consider in order to establish and maintain a highly functioning workplace wellness initiative. Leveraging best practices from workers’ compensation programs, employers who take steps to cultivate a workplace wellness culture will maximize the benefits of both their wellness and risk management programs.

Understanding the Value of Employee Wellness

Employers offering effective wellness programs will find a reduction in accidents, medical claims and impact to the total cost of risk for their organization. In addition to these benefits, researchers found employers who invest in employee wellness experience a positive return on investment (ROI). The International Foundation of Employee Benefits Plans (IFEPB) reports for every $1 spent on wellness, employers can expect to save up to $3 in healthcare costs. Similarly, Harvard concluded for every $1 invested in wellness, employers can expect to save approximately $3 in absenteeism costs.

As the benefits of employee wellness programs become known, the amount of employers offering these programs continues to rise. The Society for Human Resource Management (SHRM) recently discovered a five-year trend detailing an increase of organizations supporting and contributing to employee wellness programs.

Employers who have holistic wellness programs focused on prevention, integrated with risk management and committed to tailored employee communication, can project positive outcomes impacting their workers compensation program, safety results and overall workplace environment. Click through to discover four key steps in engendering wellness among your workforce.

Step One: Focus on Prevention.

In 2007, the workers’ compensation industry took notice when Duke University Medical Center reported that compared to non-obese employees, obese employees filed twice the amount of workers’ comp claims, had seven times the amount of medical costs, and spent 13 times the amount of days away from work after a workplace injury or illness. Preventable and manageable health conditions, such as obesity, are large contributing factors to workers compensation claims and medical costs.

According to the Journal of the American Medical Association, 34.9% of adults in the U.S. are obese. As the number of obese adults continues to rise, the amount of workers’ compensation claims by obese workers also increases. The National Council on Compensation Insurance (NCCI) discovered, within a nine-year time frame, the amount of claims with a comorbidity diagnosis for obesity or an associated illness almost tripled. NCCI also noted claimants with a comorbidity indicator for obesity had five times the amount of indemnity benefit duration than claimants who did not, and approximately twice the amount of medical costs.   

Employers who focus on prevention within their wellness program may circumvent some of the injuries, illnesses and costs associated with preventable diseases. Offering incentives for good health behavior that dually focuses on prevention and encourages healthy habits will allow employees to become active participants and take ownership of their health. Incentives centered around smoking cessation, healthy eating, physical activity and a drug free lifestyle are examples of preventative measures employers can take to create a prevention based wellness program while also improving upon their workers compensation prevention results. 

Step Two: Partner with Risk Management.

Traditionally, workplace wellness programs have been coordinated by an organization’s Human Resources department. Recently, due to the impact that healthy employees have on safe work environments, there has been a trend of workplace wellness initiatives being incorporated into risk management programs. Wellness programs have been shown to have a direct impact on workers’ compensation costs due to the level of which employee health influences organizational risk management efforts, specifically transitional duty and return to work programs. NCCI discovered obese workers who experience injuries are more likely to become permanently disabled and have higher medical claim costs.

Everyone benefits from healthy employees and safe work environments. Practical steps employers can take to integrate their risk management and wellness programs are often simple and collaborative in nature. Having a member of the wellness committee on an organization’s safety committee and vice versa will keep both programs educated and updated on industry best practices. Having a common goal for both initiatives will also promote program collaboration. All efforts should be tailored to fit the needs of the individual organization and its specific industry. Routine evaluation is critical for success.

Step Three: Consider Communication.

Technology is increasingly playing a larger role in the way employers communicate with their employees. Strategic and effective communication must now incorporate multiple communication platforms to promote employee participation. Employers who incorporate technology into their wellness program may enjoy increased employee engagement and better program outcomes.

The IFEBP supports that an organization whose wellness information is communicated electronically experiences a greater ROI than others who do not. Combining web, social and e-communication platforms with traditional methods of communication provides the opportunity for employees to obtain wellness information from various sources and not be systematically excluded due to their demographic. Employers who strive to have their communication reflect current technological trends and the communication patterns of their employees will yield increased program results.   

Step Four: Create a Workplace Culture.

Workplace wellness programs improve in effectiveness when they encourage employee participation, and are supported by a written policy and an organization’s leadership team. It is important to remember wellness is not limited to physical health. As such, employee wellness programs should extend beyond the realm of healthy eating and physical fitness.

Environmental, financial and emotional factors are also contributors to an employee’s overall wellness. Programs that take a holistic approach to wellness will have greater success promoting health amongst their employees while creating a safe workplace, an engaging wellness culture and highly functioning workers compensation program.

Thriving employees are the foundation of every great business, because they have the ability to contribute immeasurably to its success. Wellness and workers compensation programs alike best support employees when they are reflective of the industry and work environment in which they are being implemented.

Wellness programs that are tailored to the specific needs of the organization may better support employees by anticipating their needs and addressing specific threats to their overall health. This creates a strong workplace wellness culture, and allows employers to better incorporate the steps highlighted above. Organizations that value their employees and take steps to address employee wellness will experience better business, risk management and workers compensation outcomes.

Rob Standen is president of Key Risk (a W. R. Berkley Company), which provides its clients with risk management, claims, and managed care services.. With over 25 years in the property casualty industry, he has held various management positions with two regional carriers focused on workers’ compensation insurance products and third-party administrative services. During his tenure at Key Risk, he has led the claims and managed care operations and has served as President since 2007.

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