Are wellness programs expensive to run?

By Work Place | Last updated: January 16, 2019

Workplace wellness programs are offered by employers large and small as a means of improving employee health and safety. In 2015, nearly 80% of U.S. employers provided some kind of wellness program. Workplace wellness programs vary in their complexity and cost. Wellness initiatives may include features such regular health screenings, on-site flu shots, smoking cessation classes, and diet and exercise programs. Some programs include incentives to encourage employee participation.

The Wellness Council of America recommends that an employer budget $100-$150 per employee annually for a wellness promotion program. A program that includes incentives and health coaching may cost up to $400 per employee annually, a tiny fraction of traditional health insurance costs per employee. According to a survey conducted of 121 companies by Fidelity Investments and the National Business Group on Health (NBGH) the average per employee cost of employer funded wellness-based incentive programs in 2015 was $693. The most common program components provided by surveyed companies in 2015 were biometric screenings, health risk assessments, and physical activity programs.

Experts suggest that with a minimum investment of $150 per employee, an employer can expect a threefold return on investment. Programs that focus on disease management were most likely to maximize an employer’s ROI. The Wellness Council of America notes employers may not see a positive ROI if the cost per employee invested in the program doesn’t reach this minimum threshold. However, not all benefits of a workplace wellness program are easily quantifiable. Intangible benefits such as improved employee morale and engagement, sometimes referred to as the “Employee Positivity Factor” are not included in traditional ROI calculations. A portion of the costs of an employer’s workplace wellness program may be shared by employees or their health insurance carriers.

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