Lowering health-care costs for employees

Paychex offers up to $300 a year for healthier living - one reason why the payroll and HR outsourcer is No. 39 on the Best Companies to Work For list.

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By Christopher Tkaczyk, reporter
November 12, 2009: 11:23 AM ET

Why I work here
Michele Fantanza, Client service-center manager
"From the highest levels of the organization I've heard, 'If you think there's a better way to do it, try it. Be willing to take the risk and put yourself out there.' That's always been a part of our culture that has helped us to be successful."

(Fortune Magazine) -- Every business has felt the burden of ballooning medical costs, but few have focused as intently on keeping employees healthy as Paychex, the payroll and HR outsourcer based in Rochester, N.Y.

As Paychex CEO Jon Judge explains, "You can't have an expense item on your P&L that's growing double digits every year and expect that it isn't going to choke you."

So now employees who undergo a confidential health screening and risk assessment and agree to join a smoking-cessation program reap real financial rewards, such as lower deductibles and costs. All plans include free annual physicals, colonoscopies, and 100% coverage of preventive care.

So far, Paychex (PAYX), which is self-insured (meaning it runs its own plan rather than relying on third-party providers like Aetna), reports that it has shaved 2% off its medical-spending growth rate.

We asked Judge for his tips on maintaining a healthy workplace.

Keep employees in the loop.

"Spend time on education, making people aware of the consequences of a lack of wellness, where the medical costs are coming from, and what other people are doing."

Offer rewards.

By partaking in wellness activities, workers can earn up to $300 a year. "If you're willing to take this subject seriously and if you're willing to make some adjustments to a healthier lifestyle, then we will give you credit for that," says Judge.

Deincentivize fries.

Following recommendations from employees, pricing was recently changed in company cafeterias: Healthy foods were reduced, burgers and fries were marked up. And 75% of vending machines are filled with healthy snacks.

Help employees monitor their progress.

Every employee has access to an offsite personal-wellness coordinator, who is available for private consultations to create and monitor health goals.

The perks of working at Paychex

1. Low-cost legal service.
Prepaid fee deducted from paychecks allows access to a network of lawyers. Write a will or refinance a house with no additional out-of-pocket expense.

2. Continuing education.
Up to $6,500 a year in tuition reimbursement.

3. Discounted gym memberships and day care.

4. Lunch & Learn.
Online learning modules and free midday seminars are offered to help with financial matters, stress management, healthy eating, and many other topics.

5. Adoption benefits.
Reimbursement of up to $4,000 a child for expenses associated with the placement or adoption of a child. To top of page

Company Price Change % Change
Ford Motor Co 8.29 0.05 0.61%
Advanced Micro Devic... 54.59 0.70 1.30%
Cisco Systems Inc 47.49 -2.44 -4.89%
General Electric Co 13.00 -0.16 -1.22%
Kraft Heinz Co 27.84 -2.20 -7.32%
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