Home health care worker Malrissa Perkins, helps 81-year-old Alan B. Smith xxxxx in Lincon, Massachusetts, U.S., on Thursday, June 13, 2013. Forty minutes of rain-soaked rush hour -- a pit stop for a medium iced-latte included -- brings Perkins to the back door of a man who can barely make a move without her. Photographer: Scott Eells/Bloomberg *** Local Caption *** Care for chronic conditions can get expensive. (Photo: Scott Eells/BB)

HealthyCapital, a joint venture between HealthView Services and Mercy Health System, wants employers and employees to recognize that controlling health care costs can lead to bigger retirement savings.

Its new white paper shows how much employees can save if they manage chronic health care conditions such as high blood pressure and Type 2 diabetes and deposit those savings into their 401(k) accounts.

Not only are those employees likely to live longer but they also will have more funds to finance their retirement, and their employer, which likely pays about 70% of that employee’s health coverage premium, can save as well.

This is useful information for financial advisors working with sponsors of defined contribution plans, who may have or are considering a wellness program, as well as advisors working with individual clients saving for retirement.

According to the white paper, a 45-year-old woman with Type 2 diabetes and high cholesterol can lower her annual pre-retirement out-of-pocket health costs by roughly $3,300 on average annually over the next 20 years and add eight years to her life expectancy. Assuming she deposited the additional funds into her 401(k) account earning a 6% annual return, she would have increased her retirement account balance by just over $108,000.

“We can actuarially determine the savings and life expectancy benefits individuals can achieve by effectively managing their health and making small behavioral changes, said Ron Mastrogiovanni, CEO of HealthyCapital and HealthView Services. “This provide workers with a powerful incentive to contribute more toward retirement plans.”

Employers also have an incentive for workers to manage their health issues: They save about $3 for every $1 an employee save on health care costs because they finance about 70% to 75% of those costs, said Mastrogiovanni.

HealthyCapital has developed a tool that can be used in wellness programs based on the approach explained in its white paper. It includes a questionnaire for employees about their health which, when completed, can provide feedback about how much money they can save by managing chronic conditions as well as the impact on their life expectancy. Participation is voluntary but HealthyCapital notes that a monetary incentive such as $200 bonus paid to employees can boost enrollment and still save money for plan sponsors.

The HealthyCapital tool also includes a data aggregation tool for plan sponsors, allowing them to track the medical claims data of employees overall as well as employees participating in the wellness plan, segmented by health condition cohort. Plan sponsors would receive only aggregate data from their health insurance company, not the the individual names of participants in the wellness plan, which is protected by HIPPA, said Mastrogiovanni.

Currently the HealthyCapital tool covers five chronic conditions: high blood pressure, high cholesterol, Type 2 diabetes, obesity and tobacco use.