Wellness pays: new state wellness tax credit provides small businesses multiple benefits. Many are unaware of it.

MORE THAN 50 SMALL Indiana businesses took advantage of the Indiana State Department of Health Certified Wellness Program for 2007. The program gives small businesses (defined as two to 100 employees) that implement a certified wellness program for employees a tax credit of up to 50 percent of the cost of the program.

"It is beginning to build momentum," says Sally L. Stephens, who sits on the Indiana State Department of Health Advisory Board that certifies businesses and registers vendors. "Many people are still unaware of it. When we get the word out, then I think we will have a big surge of employers who either already have a program in place that they want to get certified for the tax credit, or will change their thinking m terms of the affordability of an effective wellness program."

Stephens is president of Indianapolis-based Spectrum Health Services. Spectrum has offered comprehensive health and wellness programs to employers around the country for 10 years, and is one of the registered vendors. Spectrum has a variety of available plans and resources for businesses, from comprehensive health and wellness programs to self-directed programs to onsite education programs to monthly health newsletters. It currently works with several clients with under 100 employees.

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"That doesn't mean that all of my clients with less than 100 employees automatically qualify," Stephens says. "If any one of the criteria is missing, that will disqualify them."

To qualify, wellness programs must focus on three key areas: employee weight loss, smoking cessation and preventive healthcare services. They must include a health assessment of employees, keep track of the number of participants, provide educational materials to employees in all three key areas, demonstrate that employees who make progress in the three key areas are rewarded and have a measurement tool in place to validate that the program has been effective.

If a business works through a registered vendor, such as Spectrum, the vendor will verify that the business has a wellness program in place that qualifies it for a tax credit. If the business is working with a vendor that is not registered, the business is responsible for completing and submitting paperwork to be approved for certification.

Investing in wellness. "Wellness is already the best investment that most business owners can make in their business," says Jerry Ripperger, national practice leader of consumer health for Iowa-based Principal Financial Group, a global financial services company with an Indianapolis office. "This [tax credit] makes it an even better investment for them. For so long, we thought of wellness as a health benefit ... as an expense, rather than a longer-term investment back to our business. It really benefits almost everything the organization does."

Principal conducted a wellness survey (based on 1,154 employed adults in firms ranging in size from 10 to 1,000 employees) in the fourth quarter of 2007. It showed that '1-7 percent of employees agree or somewhat agree that wellness benefits encourage them to work harder and perform better, and 48 percent said wellness programs would encourage them to stay with their current employer. Principal has a full portfolio of wellness programs available depending on the size of the employer and what it is trying to achieve. Principal's programs qualify it to be a registered vendor. Marci Crozier, general manager of Omni 41 Health

Fitness Connection in Schererville, an affiliate of Saint Margaret Mercy with campuses in Hammond and Dyer, says companies enjoy economic benefits by having fit employees. "For every dollar the company spends, it should be reaping $3 or more in return, based on lower absenteeism rates, lower health-care claims, higher productivity--all the things that fit into that formula of why there is economic benefit to exercise."

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She says Omni works with companies to help create a formula for motivation based on employee usage. Businesses can get the other services required to meet the certification through the affiliated hospitals. "We are not every spoke on the wellness wheel, but we can help with the physical side," Crozier says, "and physically if people are feeling better, mentally they are sharper."

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Focus on prevention. Chris Dobbins, executive director of health promotion services at Community Health Network in Indianapolis and a member of the advisory board for the state program, says so far approximately 2,593 Indiana employees have been impacted by the tax credit for wellness programs.

"Companies have tried everything from cost shifting in insurance, co-pays and deductibles and disease management," says Dobbins. "We've tried carrot approaches and we've tried stick approaches, but it is pretty much common sense that we really need to focus on prevention to impact the rising costs in health care that we have seen in the last several years."

Community, a registered vendor, uses a three-circle model when managing wellness programs for employers--workplace health, physical health and mental health. It has an array of services to offer employers that address those three areas. Programs take into consideration the company's objectives, its budget, the support it has from senior leadership and the results it anticipates the first year, third year and fifth year after participating in the program. "My recommendation to smaller employers is, start off small," she says. "Then build on that every year."

Dobbins knows firsthand what a difference employee wellness programs can make. Community invested more than $1 million in 2007 wellness programs for its own employees and has targeted $1.5 million for 2008. The first year Community offered a variety of programs aimed at weight loss, employees lost more than 3,000 pounds.

Clarian Health in Indianapolis also has a successful internal wellness program that has been in place for several years. "Because of the success we saw with that program, we actually developed a product called Clarian Healthy Results that we take to employers," says Lee R. Campbell, M.D.

Clarian was one of the first vendors registered for the new tax credit wellness program. It tailored its offerings to not only meet certification criteria, but to be affordable for small businesses. "What we can offer a smaller employer is 'just-in-time' staffing to provide education, do testing and do follow-up. We bring the program to them and they are buying only the time they are really using."

Campbell says the more data they have, the better they can create a program that will meet the company's needs. "Healthy Results for You, our program with coaching, is proactive," he says. "Based on the results from the health risk assessment and claims and pharmacy data, we call [participants] to invite them to coaching, diabetes education, smoking cessation or weight-loss programming."

Such programs are becoming popular across the state. South Bend Memorial Hospital's Memorial Center for Occupational Health has five locations--two in South Bend, one in Mishawaka, one in Granger and one in LaPorte--to assist area businesses with their wellness needs. Programs and services offered include health promotion and wellness, stress management, smoking cessation, nutrition and weight management, health risk assessments, exercise physiology, health fairs, health forums and business and health news bulletins.

Helping companies and their employees understand health and fitness is an important aspect of wellness and something that the National Institute for Fitness and Sport (NIFS) has been doing for more than 20 years. Founded in 1985, the institute is a leading health and fitness education and resource center and has a corporate fitness management division that helps businesses develop wellness programs for employees. NIFS also helps those businesses implement programs and evaluates worksite wellness programs. NIFS provides e-mail wellness tips, presentations and educational handouts; health screenings; health risk assessments: fitness assessments: personal exercise programs and group fitness classes; nutrition consultants and weight management, smoking cessation and stress management programs.

Understanding health risks.

Columbus Regional Hospital was also one of the first vendors registered to certify companies. "We have been doing this for 25 years, so we knew we had a program that would be validated," says Norm Eavey, regional development and ergonomics specialist and contact for corporate wellness. "We try to build in wellness so it is part of their business plan. We have methodologies that help businesses understand ... the financial implications of carrying a lot of health risks. A lot of people talk about absenteeism, but really that pales in comparison to the productivity loss and the excessive claims caused by these risk factors."

Eavey cites a study done by the University of Michigan which found that for each risk factor (high stress, smoking, physical inactivity, obesity, high blood pressure, etc.), productivity is reduced by approximately 2.4 percent. "These are scientifically studied factors ... and we know that [wellness programs] are going to have a very positive impact on the bottom line of an organization." He notes that wellness programs will play an even more important role in the future as the workforce ages and people work into their 70s and 80s.