Wellness Programs: Manage Activity, Reduce Costs, and Boost Participation

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Employee health benefit expenses have increased by more than 9% in 2012. With employers trying desperately to reduce insurance costs, workplace wellness programs are increasingly popular. Nearly 80% of large companies offer them, and those who do have seen a 28% reduction in sick leave, a 26% reduction in healthcare costs, and a 30% reduction in disability and workers' compensation costs.

On the surface, wellness incentives seem like a great idea -- manufacturing giant Caterpillar estimates its wellness program will save the company $700 million by 2015. But such programs can pose serious -- and costly -- legal risks if they don't comply with laws and regulations.

For example, Scotts Miracle-Gro was recently sued by a former employee who was fired for failing a nicotine screening test. And several federal and state laws govern how far you can go when asking employees to quit smoking or when offering incentives to lose weight.

To strike a balance between healthy employees and staying in compliance, you must understand the impact of wellness program regulations on your organization so that you can avoid problems yet still incentivize your employees to live a healthier lifestyle.