Employers want results and not just another program to administer. The two primary components to an effective wellness programs are:
- Measuring the success of the program
- Having a program that will change the behavior of your target audience
The perceived inability to measure success has been the primarily reasons why employers have failed to invest either time or money into an effective wellness program.
The truth is that an employer can measure the success of a wellness program. There are many tools that can be used but only within the last five years have enough employers measured them to have other employers believing the data.
According to the 2006 International Foundation report on wellness the following companies reported the following returns on their wellness programs.
ROI $1.40 to $4.90 - Chevron, General Mills, General Motors, Johnson & Johnson, Pacific Bell, Proctor & Gamble, Tenneco.
Other employers are reporting higher ROI, including Bank of America and Citibank at $5.50 to $6.50, and as much as $13.00 from some of the national health insurance carriers.
A successful wellness program should not be measured by your renewal increase on your medical plan alone. Based on general credibility factors, it is harder for smaller companies to count on the same ROI as larger firms. An employer could have a dynamic wellness program with measured success and still receive a gigantic increase in their health insurance costs based on a few catastrophic claims.
Wellness can be very dynamic and impact more than just the expense of your employee benefits programs. It can affect the overall productivity of your workforce. Reduced absenteeism, improved Workman’s Comp claims, higher job satisfaction and reduced turnover can all be achieved by a dynamic wellness program.
ROI statistics will continue to improve as more time and more employers implement effective programs.
The second primary component to a successful program is also the most difficult. Changing someone’s behavior is not guaranteed, but again statistics show that enough people are willing to change to make it worthwhile, and the previous ROI figures were based on these following enrollment figures.
More than 80 percent of survey respondents had an average employee participation rate of 50 percent or less. Specifically, 36 percent report average participation in the 10 percent to 25 percent range and 27 percent in the 26 percent to 50 percent range, and 19 percent of respondents experience participation levels less than 10 percent.
Look for participation levels to increase as employers move from an incentive-based program to a combined incentive- and punitive-based program. Using the stick along with the carrot will produce the best results. More employers are starting to penalize employees who don’t participate. Participation levels have a direct correlation with the ROI of the wellness program.
The State of Georgia employee benefits program has tied avoiding the tobacco penalty with the health risk assessment and wellness program. An employee must take the health risk assessment and review wellness programs to avoid the surcharge of $40 a month.
About two-thirds of all respondents offer an incentive program. Thirty five percent of respondents use non-cash rewards, including T-shirts, gym bags and water bottles. Twenty-five percent report using gift cards, and 16 percent report reductions in copays and deductibles for those who participate.
A common mistake in building a wellness program is taking the approach that, “if we build it, they will come.” Successful wellness programs need constant attention. Forty-six percent of employers use internal staff to manage the program, 11 percent use only outside vendors, and 39 percent use a combination of internal and outside vendors.
Like any successful program, the more you put into it, the more you will get out of it.
The other important item to remember is that you can build your program to your liking. Corporate culture along with your specific goals and objectives will help you build the best program for your people.
BRUCE BISHOP (email@example.com) is director of marketing and managing partner of KYBA Benefits. The company provides consulting and administrative services to more than 400 corporate accounts, ranging in size from 20 to more than 7,000 employees. Reach Bishop at (770) 425-6700 or (800) 874-2244, ext. 205.