Wellness programs: Good for employees, even better for your business

Healthcare’s been all over the news the last few years and will continue to be a hotly debated topic through November. But no matter what your political leanings, here’s one thing about healthcare that practically everyone agrees with: wellness programs are a win-win for businesses and employees.

Workplace wellness programs are any activities that promote and support healthy behaviors among employees. These might include health education and coaching, weight management programs, exercise programs, smoking cessation, nutritional advice and medical help.

The economic rationale for initiating a wellness program is straightforward: By reducing employees’ health risks, businesses will decrease their demand for services thus lower costs. And there’s persuasive proof that’s exactly what these programs accomplish. For example, researchers examined the results from 56 studies on worksite wellness programs and found that companies implementing these programs on average achieved:

  • 26 percent reduction in health care costs
  • 32 percent reduction in workers’ compensation and disability management cost claims
  • An ROI of about  $5.81 for every $1 spent

More recently, an employer survey released in August by the National Business Group on Health found that 61 percent of firms said they found wellness programs to be among the three most effective tactics for keeping a lid on health care costs.

Cost savings, however, are only part of the story.  In fact, research from the Michigan Journal of Public Affairs suggests that most returns on wellness programs investments come from improved productivity rather than lower healthcare utilization rates.  Another study cited earlier this year in USA Today  showed  that employers who invest in wellness programs see increased employee retention, attendance, and productivity. Absenteeism costs improved by an average of $2.73 for every dollar spent on wellness.

Let’s recap. Workplace wellness programs improve employee productivity, lower health costs and reduced absenteeism. No wonder such programs are becoming increasingly popular. The Society for Human Resource Management reports 61 percent of companies offered wellness programs in 2012 compared to 58 percent four years earlier.

Many employers are also offering incentives to encourage their employees to participate in these programs. The Detroit Free Press reports that in Michigan, 27% of 536 midsize businesses surveyed earlier this year tied incentives, such as lower monthly premiums, to health goals. By agreeing to take an annual online health assessment and working on goals identified in it, one employee at Chrysler’s headquarters in Auburn Hills gets a break on her Blue Cross Blue Shield of Michigan policy, which amounts to $1,200 in yearly savings in deductible expenses and other out-of-pocket costs.

Small businesses, however, still lag behind their larger counterparts in offering workplace wellness programs, despite the fact that they can have such a positive impact on any company’s bottom line. To help and encourage business owners to take advantage of these programs, this blog will be featuring Wellness in the Workplace on a regular basis. Our next topic will be DIY Workplace Wellness.

About Ken Dallafior

Ken Dallafior is Senior Vice President, Group Business and Corporate Marketing at Blue Cross Blue Shield of Michigan (BCBSM). Dallafior leads BCBSM's group sales force, oversees corporate marketing and product development, and develops and implements key corporate strategies. He also provides leadership to critical sales operations such as agent relations and commissions, sales incentives and complex issue resolution for group customers and sales agents. In addition to working in the insurance industry for nearly two decades, Dallafior played professional football from 1982 to 1992. He is founder and board member of the Detroit Lions Courage House.
 
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