Should Your Business Invest in Wellness Programs?

February 2019
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Should your business invest in employee wellness programs?

Wellness programs aren’t just a fad that can help your business look more enticing to potential employees. These programs can actually improve the health of your workers and, even better, your bottom line.

What is an Employee Wellness Program?

Employee wellness programs are intended to promote or improve the health of your employees.

Wellness programs may include discounts on gym memberships, premiums discounts, and even cash rewards for participants.

Wellness programs can focus on a variety of health-promoting behaviors, including:

  • Smoking cessation
  • Weight loss
  • Stress management
  • Improved fitness
  • Medical screenings
  • Recreational programs (sports teams, etc.)

Why Should Your Business Invest in Employee Wellness?

Health care expenditures can take an enormous toll on employees.

The cost of healthcare today has increased over 274 times what it was in the 1950s, even though the cost of all other goods and services in America has only increased about 8x since then.

In 2018, the cost of healthcare for a typical American family of 4 (covered by an average, employer-sponsored PPO health insurance plan) was $28,166.

You and your employee are likely splitting this bill:

  • 56% employer-sponsored
  • 27% employee contribution
  • 17% employee out-of-pocket

Unhealthy Lifestyles are Costly

An enormous amount of healthcare expenditures are due to unhealthy lifestyle choices.

  • Chronic diseases are responsible for 70% of deaths and ¾ of healthcare costs in America.
  • Many lifestyle-related chronic diseases, such as heart disease, cancer, and diabetes, are the leading causes of disability in the U.S.
  • Scientific studies have revealed that unhealthy people have higher medical costs.

Almost one-third of workers entering the workforce today will become disabled before they retire due to largely preventable illnesses such as cancer, heart disease, and diabetes. What will it cost your business to lose these workers to preventable illnesses?

These medical conditions are considered preventable because they can be caused (or prevented) by lifestyle choices such as:

  • Obesity
  • Smoking
  • Physical inactivity

Workplace Wellness Programs Improve Health & Savings

According to the Wellness Council of America (WCA), workplace wellness programs are a wise investment to combat rising healthcare costs and improve employee health.

According to the WCA:

  • Several scientific reviews indicate that worksite health promotion programs reduce medical costs and absenteeism and produce a positive return on investment.
  • Medical cost savings from worksite health programs average $3.48 per dollar invested in the programs
  • Absenteeism savings averages $5.82 per dollar invested in the programs.
  • Combined workplace health enhancement and risk management intervention strategies focused on lifestyle behavior change have been shown to yield a $3 to $6 ROI for each dollar invested in 2 to 5 years.
  • Disease management interventions have reported up to $7 to $10 ROI for each dollar invested in medical costs within one year.

Wellness Programs: Are They Worth It?

According to a 2012 Gallup State of the American Workplace study, employees with high overall “well-being” have 41% lower health-related costs compared with employees who are struggling and 62% lower costs compared with employees who are suffering.

A Willis Health and Productivity Survey Report revealed that nearly two-thirds of employers who offered wellness programs justified the investment based on more than just a reduction of medical costs; their programs are justified based on employee morale, worksite productivity, employee absence, and workplace safety, in addition to medical cost reduction.

In 2010, Starbucks CEO Howard Schultz stunned the world by admitting the company spent over $300 million on health insurance for employees - more than it spent on coffee beans to make its products. When insurance and healthcare costs can be your largest expenses, improving employee health through wellness programs is a wise business decision.