Residing in a rural part of the Midwest, with most clients in Kentucky, Illinois, Missouri or Tennessee, Greg Carlton's office at Peel & Holland Financial Group is about two hours from the closest city. The location, Benton, Ky., "creates a geographic issue for us" in the hunt for quality wellness companies, says the SVP of benefits & wellness. When Peel & Holland first added a wellness component to the practice in 1999, Carlton and his colleagues soon realized most vendors were too far away to offer an affordable plan or to perform onsite visits for their clients.
"It was hard to control the quality and also to find the right talent that we needed to engage with the clients," says Carlton.
The solution? Launch a private label wellness program, which Peel & Holland did in 2005. Complete with in-house clinical staff and full- and part-time wellness coordinators such as dieticians, a fitness instructor and a registered nurse, the program, entitled Well-Score, serves more than half of Peel & Holland's 300 benefit groups (15,000 lives).
Of course, Peel & Holland is not unique among brokerages across the country. As many look to build new revenue streams in the wake of the Patient Protection and Affordable Care Act at the same time that clients are demanding solutions to spiking health care costs, establishing a proprietary wellness program is an increasingly popular decision.
The rewards are palpable for employer clients as well. According to the 2012 Principal Financial Well-Being Index, 51% of program participants feel wellness benefits encourage them to work harder and perform better. Specifically, 59% of participants report having more energy to be productive at work.
For brokerages looking to get into the wellness business and be part of that contribution to employee productiveness, Carlton offers three tips:
1) Surround yourself with other advisers who have walked down the path before. "Join up with someone like Benefit Advisors Network, a firm that we have been involved with for a few years. That centers you around a large number of peers who can say, 'This is the way we became successful,' and you can learn from someone else having done a lot of the homework."
2) Survey your client base. "Ask really good questions about what your employers feel like they want, and then design your entire program around that brand. How do you want to be seen? What do your clients say about you? ... If you're highly efficient than figure out how you become highly efficient in this area as well."
3) Be transparent. "Become a trusted adviser to them, not a vendor, and that will completely change the kind of conversation that they have with you every time you're with your client," he says.
At Marsh & McLennan Agency, which focuses on mid-market size companies, Dr. David Rearick, chief medical officer for the mid-Atlantic region, had a hard time finding wellness vendors that would work with smaller groups back in 2005 when he was growing the agency's wellness division. So, like Carlton, he created his own program. Marsh doesn't provide the services, but administers the program and works with outside vendors "to create a seamless, branded Marsh & McLennan product," he says.
Although every client is of course different, Rearick advises that every agency create a list of general characteristics that are important to a successful "health enhancement strategy," and have the CEO at each client site sign the document before inputting any program. Such characteristics, according to Rearick, include having a wellness committee that is not just comprised of the company's HR staff, including an incentive program integrated into their benefit design, and making a three-year commitment to running several programs throughout the year - not just during open enrollment.
"One reason so many clients have been frustrated is that brokers and consultants have gone in there and said, 'Hey, let us find you a vendor who can come in and run a wellness program for you,' and they put it in and they walk away," he says. "That never works."
It doesn't work, Rearick explains, because running a successful wellness program requires a cultural change for an organization, and that won't occur over night.
Additionally, "the culture is never changed from an external organization; it has to be changed from the inside," Rearick adds. "So you can't just hire a wellness vendor and expect that program to work."
While a vendor can help with programing and provide services, the culture-changing experience and engagement strategy need to come from the company. Such initiatives, he says, include mentioning employee health and wellness in the company mission statement, incentivizing upper management through compensation programs that will ensure employees are engaged, and having a health and safety committee with incentivized goals as well.
Launching a branded wellness program is a "business strategy that requires the same effort, resources and time that you might put into launching a new product, entering a new market, making an acquisition," says Rearick. "This is a strategy that requires the same level of commitment."
At Phoenix brokerage the bagnall company, Lisa Weston, director of employee wellness promotion, is certainly committed. Not only does the firm have 100% participation in its own internal wellness program, but Weston also serves as a wellness advocate for bagnall clients. She acts like a part-time employee, "guiding them through the process of developing and building a program."
Just as Rearick advises, Weston requires all interested clients go through several steps before committing to a wellness plan that include a senior leadership report, employee survey, program plan development and an extensive communications program plan.
The Cornerstone Insurance Group launched its wellness program in 2010 after the St. Louis-based company's HR division was increasingly being called on to answer wellness-related questions, says Gina Juenger, director of wellness.
She immediately created an employee needs and interest survey, both paper and online versions. Administering the survey as a first step allows Juenger to deliver an aggregate report to the c-suite on what employees are most likely to be engaged with.
"While you may think it is a great idea, your employees may want nothing to do with a smoking cessation program," says Juenger.
While Cornerstone works with outside vendors for things like health fairs and screenings, Juenger, a registered and licensed dietician with a degree in exercise physiology, will do all of the leg work involved in contacting them and ensuring they are legal and compliant.
Peel & Holland's Carlton also does health screenings and fairs, and follows up with a de-identified board report to help clients understand what is driving their health needs. From there, they will build out trackable weekly, monthly and quarterly wellness campaigns.
Such campaigns go hand in hand with integrating the wellness program into the health plan design.
"It has become much more of an integrated conversation so we're not separating these two things out. Which I believe is really the future," says Mark Lacher, partner, Lacher & Associates in Souderton, Pa.
Incorporating HRA or HSA dollar incentives into the wellness model is becoming more popular, says Lacher. While some of his clients have instituted a wellness program first and then migrated toward a consumer-driven health plan, others found that after introducing a CDHP it made sense to add a wellness component.
Adds Carlton, "With the health care reform movement you're going to continue to see a really widespread adoption of health incentives and programs."
Peel & Holland works with the Integrated Benefits Institute to use special tools that follow absenteeism, presenteeism and even gauge an employee's happiness level.
Wellness is incorporated into the plan design through premium credits using the 20% that HIPAA allows for plan choice. If companies meet certain metrics, they will get credit toward next year's renewal.
Such an approach is a standards-based wellness program. At the bagnall company, Weston reports that most clients do a participation-based program that rewards employees for participating and following guidelines. Then, as plans get bigger, bagnall will suggest the client marry the wellness program to the benefit plan to have an impact on medical premium.
"That really engages the employees most," says Weston, "if you're directly impacting their pocket for participation."
Getting the word out
At Cornerstone, Juenger doesn't have an advertising plan beyond an ad in The St. Louis Business Journal for the company's wellness services. It's up to producers to initiate the conversation with existing benefits clients. Then, they bring her into the picture. Fees are built into the existing client fee structure, but non-clients or clients that are just on the P&C side will be charged separately.
In 2012, Cornerstone won a healthiest employer award from The St. Louis Business Journal - Cornerstone staff often serve as guinea pigs for wellness programs Juenger is developing - and she will get calls from people who noticed the accolade.
Having a self-branded program is definitely an advantage, adds Juenger. "I've had some of our third-party onsite biometric screeners say, 'You guys are the only ones that we know of that have all of these offerings and are promoting this.' So I think it definitely helps with client retention," she says, adding that vendors are always promoting them to people not happy with their broker. "A lot of times we get referrals just based off the wellness piece alone."
Carlton has also gained clients from Peel & Holland's program. "It's maybe not a singular reason, but it's definitely something that pushed them over the top with the decision of choosing us versus another," he says, recalling three or four instances in the last year alone where he presented against a top-tier national firm and won the business.
Lacher, on the other hand, took a slightly different route in developing his company's program. About five years ago he purchased a wellness firm that now serves as Lacher & Associate's wellness platform. Attentive Health also works with other consultants and brokers and their clients, but Lacher owns 50% of the company.
Why invest in a wellness company? "We saw that wellness was an emerging trend in the marketplace and we wanted to be the first to it in our marketplace," he says. It's a good way to "diversify revenue and engage clients in a larger conversation around integration of benefits and wellness."
Lacher markets the program to existing clients first, and has also done many local community educational seminars on wellness that resulted in new business.
"We've had people come up afterwards and start that conversation," he says. "It's been a great way to open doors and be able to talk to them about it from a Lacher & Associates standpoint."
While Lacher acknowledges the wellness component is a different business model, as it's driven by a coaching component that is more "people intensive" and therefore time-limited, he is happy with the investment. In fact, he recently bought another building near his office to house the wellness division.
"There's a lot of noise at the government level, the corporate level, the mid-market level about wellness," he says. "We feel really positive and quite bullish about the potential for the business to continue to grow."
The bottom line, says Marsh & McLennan's Rearick, is that "it's a value proposition that any health care consultant really needs to bring to their clients today.
"For the most part we've maximized the ability to cost shift, increase copays and deductibles," he says. "Do you really need a broker to tell you how to take away money from your employees? No. So we really consider ourselves health care consultants more than we do brokers, quite frankly."
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