Background: Current state law requires the Health Care Authority (HCA) to establish and maintain a state employee health or wellness program focused on reducing the health risks and improving the health status of state employees, dependents, and retirees enrolled in public employees' benefits board (PEBB) plans. The program must use public and private sector best practices to achieve goals of measurable health outcomes, measurable productivity improvements, positive impact on the cost of medical care, and positive return on investment. As part of the program, state agencies have piloted on-site wellness activities that provided access to flu vaccination clinics, mobile mammography services, healthy eating and healthy weight support discussions, and chronic disease management courses. Since 2007, 21 agencies with over 20,000 employees participated in the HCA wellness demonstration program.

Public and private sector wellness programs use a variety of interventions and incentives to promote healthy employee lifestyles and behavior. The financial incentives to promote healthy employee behaviors can include increases or reductions to premiums, deductibles, co-pays, and co-insurance, and may provide subsidies for health club memberships, and similar incentives for such means.

The state employee collective bargaining statutes provide that the employer is not required to bargain over matters pertaining to health care benefits or other employee insurance benefits, but must bargain regarding the dollar amount expended on behalf of each employee for health care benefits. For the past three biennia, the state and employee unions have bargained regarding the average percentage share of the employee health care premium that would be paid by the state.

Summary of Engrossed Substitute Bill: The state collective bargaining statutes are amended to provide that the matters subject to bargaining include the employer's percentage contribution of the total weighted average of the projected health care premium for each employee eligible for insurance.

Beginning no later than January 1, 2014, all state employee health care benefit plans provided by HCA must be offered in conjunction with an employee wellness program developed by HCA pursuant to RCW 41.05.540. The program must include premium reductions, premium increases, or other financial incentives to promote employee achievement of identified wellness targets or goals. For employees covered by collective bargaining agreements for 2011-2013, the employee wellness program must be offered after the current bargaining agreement provisions are no longer in effect. The Governor must appoint an eight-member committee composed of three representatives of state employee labor organizations, one non-represented state employee, and four representatives of state agencies or higher education institutions to consult with and advise the HCA director regarding the wellness program.

The HCA role in implementing state employee health and wellness program is clarified, and includes coordinating with PEBB to integrate the wellness program into the PEBB benefit package design.

Staff Summary of Public Testimony on Proposed Substitute as Heard in Committee: PRO: There is considerable value in these services – they can improve employee engagement and lead to better health and reduced health care expenses. Effective programs are about changing behavior and we know that is very hard to do. It takes a sustained commitment to achieve lasting results. Optimum wellness program results are only achieved if all the stakeholders are actively part of planning and designing the program – including employees and employee organization representatives. Wellness programs have had mixed results across the county; there is a lot of variation in program designs. Research is available on what works and what does not. It needs to be a strategic combination of both the carrots and the sticks. Literature will cite a return on investment in the ratio of one to three range – $3 saved for every $1 invested in the program. King County did it right, they made a long-term commitment, invested a great deal, and are experiencing a positive return. Every year they advance and improve the program; it is never static.

CON: We are strong proponents of wellness programs and have bargained them in the private sector, including with Group Health and Swedish Hospital. We support the previous testimony and the King County program. However, to take away our ability to bargain and be at the table with the state would not be a favor to the state. The success of the wellness program depends on the investments our members make; making them feel like they are a part of the program and not manipulated by it is a key to success. We support many aspects of wellness programs. The bill is unnecessary. When groups engage in collective bargaining you do not want to preclude yourself from any options. Collective bargaining is the art of the flexible. The bill would limit options for collective bargaining and undermine the bargaining process. If we have very good ideas for a wellness program, the employer could say it does not want to discuss them. We are currently discussing wellness options with the Inslee administration. Both the administration and the state employee healthcare coalition are interested in wellness programs and intend to include a program in an agreement. Mandating a particular process in advance shackles the collective bargaining process. We do not need a bill.