Employee wellness programs offer employers more than cost savings

Employers today face the rising cost of an employee, which can be attributed to increased health insurance premiums or disability costs, or because health issues are affecting their production. Businesses looking for a solution may find one in the implementation of a company wellness program.

“The recession resulted in lots of layoffs,” says Megan Baker, wellness coordinator at Benefits Resources Group. “Though it’s ended, many businesses didn’t rehire to pre-recession staffing levels. So there is a serious need to ensure employees are performing at the top of their ability. A wellness program can have a huge impact on how someone performs in the workplace.”

Smart Business spoke with Baker about the costs and benefits of implementing an employee wellness program.

What can employers expect to gain from a wellness program?

A well-executed wellness program can help employers realize reduced disability claims and absences from work, improved morale related to a reduction in employee stress, and better recruitment and retention from a often higher-performing candidate pool that values wellness. Employers also see a shift in presenteeism, which is a measure of how well an employee works while on the job. While an employee may show up daily, come in and leave on time, they have issues, health related or otherwise, that make concentrating on their job difficult. An on-site wellness program can improve employee health, which can improve productivity.

What is a realistic timeline for a return on investment and how is it calculated?

Typically clients can expect to see a return three years after a wellness program is put in place. This ensures any claims anomalies are normalized so program effectiveness can be more accurately analyzed.

But how the return is calculated depends on the size of the client, and how they’re funded with their insurance provider. When the business is self-insured and sees its claims on a day-to-day basis, the provider is able to look at claims year-over-year to determine ROI. Calculating the ROI of smaller, fully insured clients hinges on data provided by employees though their health risk assessment. This gives the provider aggregate cohort reporting that shows per employee, per year decrease or improvement in health score.

What are the legal implications and considerations for a wellness program?

It depends on the type of wellness program an employer has in place. Activity or participation based programs allow an employer to reward employees based on employees performing or not performing an aspect of the program. An outcomes-based program requires employees to meet a measurable health goal to get a reward, whether that’s a premium incentive or a payroll credit. This program requires more attention to the laws surrounding wellness programs as employees must be offered a reasonable alternative or appeals process if they’re unable to meet the goals. And there are limits on the differential an employer can charge based on whether someone meets the goals or doesn’t.

Providers can analyze whether it’s better to use an activity or outcomes based program and ensure employers are moving forward appropriately.

Why use a provider to implement a wellness program instead of in-house resources?

A trusted provider will custom design a plan that works for the client based on client expectations and the provider’s expertise. Providers are researching and implementing new ideas, vendors and programs to better serve their clients’ needs, which require resources most HR departments do not have. Also, providers have negotiated proprietary pricing with vendors.

It’s a large part of a provider’s job to take all the work out of a wellness program. They can design communications HR can use to talk with employees about the program, and perform the analytics that measure efficacy. Partnering with a benefits consulting firm that also manages an effective wellness solution is advantageous for companies looking to create funding and measure ROI.

The effective implementation of a wellness program is a crucial component of realizing all of its benefits. Consider working with a provider that understands the keys to success to ensure ROI. ●