Are wellness programs expensive for employers to run?

Q:

Are wellness programs expensive for employers to run?

A:

Generally, the goal an employer has behind a wellness program, besides making employees happier and healthier, is to cut healthcare costs, as the insurance premium costs are continuously increasing. Another objective would be to increase productivity and reduce absenteeism, which also have monetary benefits to the company.

Wellness programs do not have to be expensive to an employer. However, there are many options for wellness programs that vary widely in cost and benefit.

Casual health classes and information campaigns alone are relatively low-cost affordable options, but they are often not enough to create a wellness culture or realize large savings, because they are not sustainable and need to be combined with other interventions such as health coaching, screening tests, and incentives to motivate employees.

Companies can chose to use a third part administrator to run their program at an higher initial cost but can often see a quicker return on investment that decreases the net cost of the program once savings are considered. In addition, a company may seek alternative funding sources, such as cost shares with employees or health company sponsors in certain situations. Health fairs can often be part of a wellness program and health companies will often donate time and personnel to such a fair for things like blood pressure screenings.

Another aspect is that lifestyle interventions targeting all the employees are not lowering healthcare costs so much as at-risk employees’ prevention interventions and disease management interventions. In fact, this category of employees with one or more risk factors (overweight, blood pressure, diabetes, or depression for instance), is more likely to develop a chronic disease and/or a complication, it is consequently a significant factor in high healthcare costs, absenteeism, and low productivity. By focusing on at-risk employees an employer can reduce overall wellness program costs while still targeting the most likely healthcare savings down the road.

The bottom line is that a wellness program does not have to be expensive to run, but an employer must be clear on their goals and expectations for the program in order to ensure that money spent on it is well-spent.

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