Wellness programs are promoted as win-win. Employers save money on health care benefit costs. Employees improve their health.
But there has been controversy in recent years over just how much return on investment (ROI) there is for promoting wellness. According to a 2010 study by a Harvard economist, a wellness program returns $3 in health care savings and $3 in reduced absenteeism for every dollar invested.
But in 2013, the release of the “Rand Report on Workplace Wellness: What Employers Must Know” rocked the wellness industry. The report, developed for the U.S. Departments of Labor and Health and Human Services, indicated that wellness programs don’t save employers as much money as thought. The report said a more reasonable return on the program was $1.50 for every dollar invested per employee.
Since 2013, though, wellness program administrators have been reassessing and increasing what they see as the ROI in wellness investment.
The Centers for Disease Control and Prevention states that 86 percent of the nation’s $2.7 trillion annual health care expenditures are for people with chronic and mental health conditions — costs officials say can be reduced substantially. With health costs and lost productivity on the rise and the greater prevalence of chronic illnesses such as diabetes, wellness programs can be a valuable way to save money. Many programs also increase morale and productivity.
Here’s what some experts say is the best way to run an effective wellness program:
Before you declare that your new wellness program is the best thing since gluten-free sliced bread, make sure your company culture is strong. As an employer, you must ensure your employees believe in and enjoy their work and feel they are of value to the company. They also must trust you with sensitive information. This will make it easier to sell wellness benefits.
It also helps if employees have a say in designing the program and everyone understands its goals. Employers interested in a good return on investment should focus on employees who have chronic diseases, like heart disease, rather than those with bad habits, such as smoking.
Invest in the Right Component
The Rand Report explained that wellness programs have two components. Lifestyle management focuses on helping employees with health risks, such as smoking and obesity. Disease management helps employees who have chronic diseases take better care of themselves, such as taking their medications or having prescribed medical tests performed.
The Rand Report authors found that the disease management portion was responsible for 87 percent of the savings, even though only 13 percent of employees participated in that part of the program. Successful disease management also can help reduce hospitalization costs.
While you might be tempted to offer health screenings and one-on-one coaching and counseling sessions, remember that this option can be expensive. Conducting seminars on how to change unhealthy behaviors or make better food choices is less expensive.
Offer the Right Perks
Access to low-cost gym memberships, yoga classes or other fitness programs are great benefits for many employees, but other employees might have behavioral health needs. Employees who are stressed, facing a financial crisis or dealing with substance abuse can benefit from behavioral counseling sessions.
Don’t Scare Your Employees
Even if you have good intentions and only want to be helpful, asking certain questions about your employees’ health can be invasive. Be careful what you ask. If you do need to know personal information to provide the right health care, consider using a third party administrator who won’t share the information with you but will point the employee to the right place for care.
Also be mindful of how mandatory participation — particularly when combined with a penalty — can seem more like a punishment rather than something that will help your employees. Some employees might enjoy a new Fitbit to count steps, while others would view it as being intrusive. Always allow employees to opt out if they aren’t ready to join the program to get healthy.
For help with your employee wellness program, please contact us.
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