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Company programs that encourage weight loss, a healthy diet and exercise are more likely to be embraced by workers if employers motivate them to sign up and give them tools to record their progress, according to a study released in Washington on Monday, July 14, by a major health insurer.

In a survey of 3,552 employees at eight companies, the Blue Cross and Blue Shield Association found that participation in wellness initiatives increased by 21 percent if the firms combined wellness education with “activation components,” such as online registration and tracking, participant guides and work-site competition.

The companies took part in the insurers’ Engaging Consumers @ Work program, a 10-week wellness pilot study conducted by Blue Cross and the Department of Health Care Policy at Harvard Medical School. Survey data was collected from June 2006 to April 2007.

The combination of education and motivation increased employees’ awareness of wellness programs by 12 percent and boosted by 15 percent their perception that “my employer is interested in my health.”

Wellness programs are becoming increasingly popular as companies try to reduce their health care costs. But for them to be effective, employers have to do more than hang posters or distribute nutrition guides.

“Employees do not consider or recognize passive education initiatives to be work-site health/wellness programs,” the survey states.

DTE Energy, a Detroit utility company, puts corporate effort into helping employees avoid sickness because that’s where it anticipates the best outcomes are for its bottom line and its workers. The company, which has 10,000 employees, participates in Healthy Blue Living, a program sponsored by the Blue Care Network of Michigan.

“Prevention is far less expensive and far more beneficial to everyone involved than cure,” Richard Lueders, director of compensation and benefits, said at the National Press Club. “It’s the win-win scenario.”

There is some empirical evidence of wellness success. Over the past three years, DTE has saved nearly $12 million on an investment of $7.6 million in disease management. It has reduced its high-risk population from 15 percent to 9 percent the past three years.

Usually, the return on walking programs, health screenings, smoking cessation and nutritional counseling is difficult if not impossible to determine. Food Lion, a supermarket in the southeast and mid-Atlantic region that offers all of those activities, could not pinpoint concrete results.

But Pat Fulcher, vice president of associate services for the 85,000-employee grocery retailer, argues that it is indisputable that a healthy workforce is more reliable and productive.

“There is a tie between wellness and the bottom line,” Fulcher said at the press conference announcing the study. It shows up not only in overall company performance but also in keeping health care costs below expectations, she added.

“We are beating the trend,” Fulcher said.

Still, corporate leaders will eventually want to see a specific payoff to wellness.

“Our CEO does expect a return,” Fulcher said. “But he also understands this is not something you change today. It takes time and effort to get people to change their lifestyles.”

Before joining a wellness program, employees may need be reassured that their medical information will be secure. Lueders says this is achieved by having outside providers run the wellness programs and report only aggregate data about worker ailments to employers.

In addition to getting employees onboard, Blue Cross Blue Shield, DTE Energy and Food Lion also want to raise awareness on Capitol Hill about wellness initiatives. They spent Monday visiting members of Congress, which is likely to begin major health care reform next year.

They’re making the point that companies are encouraging the 162 million people they cover to take better care of themselves—an approach that is rapidly gaining in popularity.

“More employers are designing and executing programs,” said Helen Darling, president of the National Business Group on Health. “It is deeply embedded in the culture of these companies. C-Suite leadership is the key. It really is a sea change.”

—Mark Schoeff Jr.

More employer plans will likely meet requirements of Massachusetts’ health care reform law if draft rules approved Thursday, July 10, are implemented.

The rules were unanimously approved by the Massachusetts Health Insurance Connector Authority board, the state agency charged with implementing key elements of the 2006 law.

The landmark law requires that state residents be enrolled in health plans that meet certain design standards. Individuals, including employees, who are not enrolled in plans meeting so-called minimum creditable coverage standards could be fined more than $900 a year.

The new rules, which aren’t likely to be finalized until October, would replace rules approved last year by the board.

The most significant change involves the ability of employers to combine health plans through which employees receive coverage, making it more likely the employees receive creditable coverage. That ability to combine applies directly to high-deductible health plans.

To meet the creditable coverage standard, an annual deductible for single coverage cannot exceed $2,000 and can’t be any higher than $4,000 for family coverage. That had posed a problem for many high-deductible plans linked to health reimbursement arrangements with deductibles exceeding the $2,000 and $4,000 maximums.

Under the draft rules, though, any employer contributions to the HRA would be recognized as an offset to the deductible, increasing the chances that the plan would satisfy the coverage requirements.

In the case of high-deductible plans linked to health savings accounts, the plans automatically would pass the minimum creditable coverage requirement in 2009. Starting in 2010, like HRAs, employer contributions to employees’ HSAs would be recognized to determine whether the plans met the creditable coverage rules.

Another change approved by the board eases a requirement that health plans that impose a deductible provide three annual preventive visits for those with single coverage and six annual visits for those with family coverage before a deductible is charged. Instead, the new rules would also allow plans to meet the requirement by providing a schedule of preventive visits that meets nationally recognized standards.

Since enactment of the Massachusetts law, about 350,000 previously uninsured state residents have obtained health insurance coverage, with nearly 175,000 people insured through a program that pays or heavily subsidizes premiums for those with low incomes.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Joining three other federal appellate courts, the 2nd U.S. Circuit Court of Appeals ruled Wednesday, July 9, that cash-balance pension plans do not violate federal age discrimination law.

In a unanimous decision, the appeals court affirmed two separate lower court rulings finding that cash-balance plans sponsored by Verizon Communications and Equitable Life Assurance Society—now known as AXA Equitable Life Insurance Co.—do not discriminate against older workers.

Closely following other court rulings on the issue, the 2nd Circuit said that while the benefits provided to younger employees are worth more than the same benefits provided to older employees, in terms of a retirement age annuity that could be purchased, that difference is the result of time and compound interest and does not constitute age discrimination.

The 2nd Circuit is the fourth appeals court to rule that cash-balance plans are not age discriminatory. In an August 2006 landmark ruling, the 7th U.S. Circuit Court of Appeals overturned a 2003 decision by a federal judge in Southern Illinois that IBM’s cash-balance plan discriminated against the company’s older workers.

Last year, two courts—the 3rd U.S. Circuit Court of Appeals in a case involving Pittsburgh-based PNC Financial Services and the 6th U.S. Circuit Court of Appeals in a case involving World Color Press—also rejected age discrimination charges.

All the courts have rejected the argument made in numerous suits that the plans are age discriminatory because the same earned benefit will produce a smaller retirement-age annuity for older employees than younger employees.

The appeals courts’ rulings, coupled with a 2006 federal law that protects new cash-balance plans from age discrimination suits, “should be the death knell of cash-balance plan litigation,” said Nancy Ross, partner with McDermott, Will & Emery in Chicago. Ross represents AXA Equitable.

The decisions “will quash participants’ desires to challenge these plans. We haven’t seen new litigation in this area for some time,” Ross said.

Still, there is at least one more appeals court to be heard from on the issue. The 9th U.S. Circuit Court of Appeals is expected to rule soon on a lower court ruling dismissing age discrimination charges against Southern California Gas Co.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Every few months an article comes out purporting to show that hordes of mothers are opting out of the workforce. The articles stir up controversy among working moms and probably make some managers nervous about whether their female employees are really committed to their careers for the long term.

And now a new study may prove that the hype about the “opt-out revolution” is just that—a lot of hype.

According to a study published in the June issue of the American Sociological Review, less than 8 percent of professional women born since 1956 have left the workforce for a year or more during their prime childbearing years.

The percentage of professional women working more than 50 hours a week has increased from less than 10 percent for those women born before 1935 to 15 percent for women born after 1956, according to the study.

Furthermore, the study, which is based on data from the U.S. Census and the American Community Survey, found that the percentage of mothers with young children working full time has risen to 38 percent for women born from 1966 to 1975, up from 6 percent of women born from 1926 to 1935.

“Generation X and late baby boomer women are still working less than their male counterparts, but they are working more than their previous cohorts,” says Princeton University researcher Christine Percheski, who conducted the study.

The reason that there is so much hype about women opting out of the workforce is because the issue resonates with working mothers, Percheski says. “It’s very hard for women to combine parenting and their professional work,” she says.

This study sheds light on a new question that employers need to be asking themselves, says Sherry Saunders, a spokeswoman at Business and Professional Women/USA, a Washington-based organization. “Other studies have said that since women are opting out of the workforce, that’s why they don’t make the same amount of money as men,” Saunders says. “But this study shows that this isn’t true.”

The study findings also show that employers need to think more about what they can do to recruit and retain women, Percheski says. “Most of these women will want to work full time, so it’s important to not shortchange them because you think they are just going to leave and go have babies,” she says.

This means that companies that have shunned things like flexible work schedules and part-time work, thinking that they’re a waste of time for women who won’t stick around anyway, may want to reconsider. Such programs could offer the companies a competitive advantage in retaining women trying to balance the two halves of their lives, Percheski says.

But offering alternative work schedules is important in retaining all workers, not just women, says Ellen Galinsky, president of the Families and Work Institute, a New York-based nonprofit organization.

From 1992 to 2002, the percentage of college-educated women and men among all ages who wanted more responsibility in their jobs dropped 21 percent and 16 percent, respectively, according to a recent Families and Work Institute study.

“People today are more aware that they don’t have enough time with their families,” Galinsky says. “There is an opt-out revolution, but it’s not just about women.”

—Jessica Marquez

A key House leader on immigration policy intends to push into next year a contentious debate regarding employment verification.

With the law establishing a government-run electronic system set to expire in November, Rep. Zoe Lofgren, D-California and chairwoman of the House Judiciary subcommittee on immigration, says there is too little time left on the legislative calendar to decide whether to expand, overhaul or end the mechanism known as E-Verify.

Lofgren and Rep. John Conyers, D-Michigan and chairman of the House Judiciary Committee, are seeking to move quickly through the House a bill that would extend E-Verify for 10 years as a voluntary program. 

Deep divisions over E-Verify were apparent at a subcommittee hearing Lofgren chaired in June. She and Conyers expressed misgivings about the system, which checks the employment eligibility of workers against Department of Homeland Security and Social Security databases. So far, 69,000 companies have signed up.

In a July 9 interview with Workforce Management, Lofgren indicated she continues to have concerns about E-Verify but that it would be counterproductive to let it expire.

“We’ve got six weeks left in this session, and we’re just not going to get that done,” she said of reauthorizing the E-Verify law.

By proposing a 10-year extension of the current system, Lofgren and Conyers are trying to forestall a bill that would make E-Verify permanent and mandatory for all employers, according to Capitol Hill observers. That bill has wide bipartisan support but is opposed by Democratic leadership leery of enforcement-only measures.

Lofgren wants to maintain E-Verify without modification while fundamental changes are considered in the next Congress.

“We won’t take the 10 years to replace it,” she said. “My guess is that we’ll finalize the reform effort next year.”

Lofgren anticipates that Sen. Barack Obama, the presumptive Democratic presidential nominee, will be elected and will spur Congress to take up comprehensive immigration reform in 2009.

The failure of such reform last year in the Senate has motivated the Bush administration, many Republicans and conservative Democrats to emphasize work-site enforcement.

But employer groups criticize E-Verify, calling it inefficient, prone to error and unable to detect identity theft. They say mistakes in the Social Security database could lead to millions of Americans mistakenly being declared ineligible to work.

The Society for Human Resource Management is leading a coalition of HR groups advocating a bill that would clean up Social Security records and then replace E-Verify with an electronic verification system based upon an existing child support enforcement network.

Mike Aitken, SHRM director of governmental affairs, said he is not surprised that congressional leaders have decided to maintain E-Verify for the time being. Reform bills introduced this year were likely to be markers for action next year.

But Aitken is disappointed that such a long E-Verify extension is in the works, especially when nearly a dozen states have implemented E-Verify mandates.

“They’re not addressing the major underlying problems by giving it a blanket 10-year extension,” Aitken says. “In the meantime, employers are stuck with a system that doesn’t work.”

As the chances for a rifle-shot immigration bill on verification fade, the prospects for stand-alone bills on expanding immigration for highly skilled workers also are dimming. Lofgren’s talks with Republicans haven’t produced results.

“We have to reach some rough consensus in this Congress to move forward,” she said. “We have not yet achieved that. It’s likely that the bulk of reform … will happen next year under President Obama.”

—Mark Schoeff Jr.

Blue Cross Blue Shield of Michigan has formalized a policy that will deny payment to hospitals that commit nine medical errors considered preventable.

The policy on serious medical events, which goes into effect October 1, follows a similar policy announcement made this year by the federal Centers for Medicare & Medicaid Services.

Blue Cross officials said the new policy is consistent with existing hospital and provider contracts that do not allow payment for medically unnecessary services regardless of cause.

The medical errors in CMS’ policy include objects left in a body after surgery, air embolism following surgery, blood incompatibility, equipment-associated infections, advanced pressure sores and hospital-acquired injuries, including falls and burns.

In addition to those six, the Blues added three others: surgery on the wrong patient, surgery on the wrong body part and wrong surgery.

In developing its policy, Blue Cross consulted a number of physician and hospital organizations in Michigan. The Michigan Health and Hospital Association, a Lansing-based group that represents the state’s 146 hospitals, has also created a similar policy on billing for preventable errors.

Medicare also is taking comments on adding another nine conditions to its medical error nonpayment list. The additional conditions will be effective in October 2009.

Those additional conditions will include surgical site infections, septicemia, ventilator-associated pneumonia, delirium, Legionnaires’ disease and pulmonary embolism.

Eventually, Medicare is expected to adopt all 28 preventable medical errors identified by the National Quality Forum, a Washington-based coalition of employers and health care organizations.

Medicare has cited studies on 18 types of medical errors that accounted for 2.4 million extra hospital days, $9.3 billion in excess charges and 32,600 deaths.

Filed by Jay Greene of Crain’s Detroit Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

Employers will be able to take into account expected future growth of their pension plan investments when calculating current contributions under a bill unanimously approved by the House of Representatives on Wednesday, July 9.

The measure makes technical corrections to the Pension Protection Act, which was signed into law in 2006 and went into effect in January of this year. Most of the changes to the original bill are minor.

The corrections measure passed by a voice vote. It will now have to be reconciled with a similar but not identical Senate bill. Supporters hope the Senate will vote on the House version to speed the process.

Some resistance cropped up in the House over clarifying that plan sponsors can use an actuarial technique known as smoothing to determine liability. At least one member indicated that such a change to the underlying pension law would be substantive rather than technical.

The 2006 law limits smoothing to 24 months instead of the four years previously allowed. The Bush administration was concerned that smoothing, which it wanted to eliminate altogether, had led companies to sharply undervalue their pension liabilities and stumble into huge defaults.

Treasury Department regulations implementing the pension law would repeal asset smoothing and force companies to average assets over two years, a practice that critics contend undervalues pension plans and could force companies to suspend lump-sum payments or accruals.

Business advocates had been quietly but firmly pushing the House to validate smoothing in the corrections bill. Experts say the practice sharply reduces pension volatility, giving companies breathing room to make sound funding decisions.

“It’s good for the pension system,” said Ethan Kra, a worldwide partner and chief actuary-retirement at Mercer in New York. “It removes an incentive for employers to exit the defined benefit system. Smoothing allows companies to budget cash flows more rationally.”

Pension costs avoided through smoothing can vary widely but often are significant, according to Kyle Brown, retirement counsel at Watson Wyatt in Arlington, Virginia.

“For a lot of companies, this can be a big-ticket item,” Brown said.

Rep. Earl Pomeroy, D-North Dakota and a leading proponent of the corrections bill, asserts that the overall economy will benefit if employers can more finely calibrate their pension contributions through smoothing.

“In these times of economic uncertainty, this will prevent employers from being forced to divert millions more to their pensions that could otherwise be invested in their workers and help them weather these difficult economic times,” he said in a statement after the vote.

During floor debate, Pomeroy praised the bipartisan action on the bill. “This sets the stage for further collaboration” on pension issues, he said.

For now, there’s no crisis spurring further congressional action. Despite current economic stress, pension funds are holding up.

“Plans are in better shape than they were several years ago,” Brown said.

—Mark Schoeff

The Netherlands has the most popular health care system among 10 countries surveyed, while Americans believe their system—which is built around employer-sponsored health care—is the one in most need of a complete overhaul, recent research reveals.

Results from several recent surveys were compiled by Harris Interactive, a Rochester, New York-based polling company, to reveal that only 9 percent of the adults surveyed in the Netherlands said their health care system needs to be rebuilt, while 33 percent of Americans said the system in the U.S. should be scrapped and completely changed.

Among the respondents in the Netherlands, 42 percent said the system works well and only minor changes were needed, while just 12 percent voiced that opinion in the United States. Italy’s system, though, was deemed even more unpopular than America’s in that regard, with just 11 percent saying health care in that country works well. Twenty percent of Italians surveyed said their system needs to be completely rebuilt.

Researchers polled adults in the Netherlands, Spain, Canada, France, Great Britain, Germany, New Zealand, Australia, Italy and the United States. The results are at www.harrisinteractive.com.

Filed by Michael Bradford of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.