With health insurance premiums at some of the highest rates they have ever been and no end of these increases in site, many employers are looking for alternative methods to keep health care benefit costs low. One of the most popular incentives that has been included for employees over the last several years are employee wellness programs.
For Johnson & Johnson, from 2002 to 2008, the return was $2.71 for every dollar spent on employee wellness programs.
Corporate Employee Wellness Program
There are some many great success stories like Johnson & Johnson, but not every employer has has such levels of success. An aging workforce means that health care costs are only going to keep rising, but there is one fact that remains inescapable: healthy employees cost employers less.
- In a recent study of 185 workers, 57% those who were initially classified as high risk because of their health were able to be converted to a low risk status in just 6 months.
- Employee wellness programs are able to reduce medical costs for employees by $1,421 compared to the previous year.
- For the average employer, $1 spent on healthy interventions, $6 of health care savings were able to be achieved.
- Within six years of the institution of an employee wellness program, lost work days have declined on average by 80% and modified-duty days have declined by 64%.
- The percentage of decline that workers’ comp insurance claims is able to achieve after 6 years of an employee wellness program: 50%.
- Voluntary turnover rates at companies which have highly effective employee wellness programs is just 4%.
- The voluntary turnover rates at companies which have low or no employee wellness program: 15%.
The old adage of business is that sometimes you need to spend money in order to make money. That’s very much the case when it comes to starting a brand new employee wellness program. The payoff, however, can be very immediate. Many high risk employees that buy into the process can dramatically improve their health in just 6 months. When the implementation period is extended out to 6 years, employers are able to save millions of dollars annually just because they have employees that are happy and healthy. The bottom line is this: happy employees come from wellness programs and those who participate generally decide to stay instead of leave. It is the #1 thing that employees miss from employers that offer such an incentive.
Are Specific Interventions A Better Option?
- 79% of employers that offer a wellness program feature benefits that are focused on better nutrition and weight management.
- The percentage of employee wellness programs that have a specific focus on smoking: 77%.
- 86% of employers offer health promotion activities in addition to wellness program activities.
- The most common disease management programs involve diabetes [85%], asthma [60%], and coronary heart disease [59%].
- The employee participation rates for smoking cessation programs: 7%.
- 46% of employees participate in clinical screening activities that are sponsored by an employee wellness program.
- In one recent study, it was determined that roughly 50% of wellness program participants reported positive changes in their walking activities and eating habits, and about 25% of participants reported getting closer to a healthy weight.
On the surface, the basic screenings are more of a successful component of employee wellness programs, but that is because they target 100% of the workers in that organization. To achieve specific results, specific programs must also be offered. The good news is that the specific programs can have big payoffs at the end of just one year. By the time a program extends out to its third year, similar results are still achieved. This is good news because not only are employees happier and having more energy because they are living healthier, employers are happy because they are saving money and getting more production.
Could Employee Wellness Benefits Be Underreported?
- Only 2% of employers have actually reported savings estimates that have occurred from the implementation of their wellness program.
- Only 1 out of every 2 employers has even evaluated the program impacts that have been experienced by employees.
- The percentage of employers who express confidence in the fact their programs are effective is an overwhelming majority.
- A 5 year participation in an employee wellness program has the potential to lower annual health care costs for employees by $157 annually.
- Only 10% of employers use wellness programs that are specifically tied to incentives that are health related, although 49% of employers use incentives as a primary components of their wellness program.
- About 7% of employers that offer wellness programs reported administering results-based incentives through their health plans.
- Less than 10% of the total cost of health coverage for employers with a wellness program was attributed to the distribution of incentives.
- 84% of employers use some form of a reward instead of a penalty.
- In one study, 100% of the employers used novelty rewards, such as t-shirts or coffee mugs, as a strategy to engage employees into a wellness program.
The problem with modern employee wellness programs is that most employers aren’t taking the time to track their successes. These employers are implementing programs because it sounds like a good idea and others are finding success with the programs, so they just assume that they’ll experience success as well. This has obviously skewed the results of the statistics that have come out about employee wellness programs because the data is incomplete. Johnson & Johnson may have been able to save $250 million, but that’s because they have metrics in place. 42% of employers use gym memberships or cash rewards as an incentive. How do they know if these are actually working? Until the average employer starts tracking wellness data, we won’t ever have a true picture on the benefits of these programs.