Bottom-line health Featured

7:00pm EDT February 28, 2007

Studies have shown that for every dollar a CEO spends on employee wellness programs, the company receives $2 to $3 in return. Not only is the tangible ROI favorable, but so are the intangible benefits, and the average monthly cost can range from zero to a minimal $2 to $4 per employee. This is great news, considering that group health insurance premiums have been increasing an average of 15 percent per year and the work force is aging and staying on the job much longer.

Employees who are healthy have better attitudes and are more engaged in their work — factors that most employment experts say leads to greater productivity. Today’s technology allows more employees to be reached by wellness programs, and accompanying the increased reach is program cost-effectiveness.

“There are three main factors that are driving the rise in health care costs: the aging population, medical technology advances and greater availability of prescription drugs,” says Brenda Fagan Johnson, employee benefits specialist with Westland Insurance Brokers. “One way that an employer can impact the rising cost of health insurance is by having healthier employees.”

Smart Business spoke with Johnson about the evolution of employee wellness programs and how CEOs can benefit from initiating a program.

What types of employee wellness programs are available?

Wellness programs are frequently available through your group health insurance plans. They offer newsletters and on-site health fairs, as well as brown bag lunch-and-learn sessions, for employees. Online wellness programs offer educational tools and health risk-assessment information. They often include a 24-hour nurse hotline offering advice in one-on-one sessions. Coaching programs that assist employees with goal-setting and then give them support as they work to achieve their goals are available via telephone.

There’s also something for every company’s budget. CEOs can create low- and no-cost programs that can be an adjunct to an insurer’s employee wellness program or as a standalone entity. Those options include organizing wellness committees and participating in community-based walk/run events. Many of the wellness materials are free through your health plan or other government-sponsored programs. Your committee can help to secure and distribute these materials and organize your events.

What are the benefits of an employee wellness program?

The definition of wellness is the condition of being healthy or sound as a result of diet and exercise. The data on the impact of employee wellness programs shows reduced absenteeism; lower worker’s compensation costs; lower costs of health care claims and disability claims; and improved employee morale. All of these contribute to a good working environment, low employee turnover and higher productivity.

Studies have shown that it takes about $45,000 on average to hire and train a new mid-level worker. Employee wellness programs help position companies as an employer of choice, which will both attract new workers and retain the ones you have. About 65 percent of the American population is overweight. Smoking contributes greatly to heart disease and cancer. Employee wellness programs create a culture of ‘healthfulness’ and support from fellow employees for losing weight and quitting smoking.

Today’s work environment can be very stressful, so addressing good mental health as a component of a wellness plan is vital. An Employee Assistance Plan (EAP) is made up of short-term crisis counseling for family issues, legal problems, debt resolution and a full array of resources for everyday challenges that can hinder employees from focusing on work. The cost of an EAP plan is about $2 per employee per month.

How can a CEO influence employee wellness?

Leading by example and executive sponsorship are the keys to any program’s success and an attitude shift among workers. CEOs can emphasize the importance of employee health by attending committee meetings and events and even suggesting healthy choices in the employee cafeteria or a change to heart-healthy snacks in the vending machine. CEOs can further demonstrate their support by offering incentives to employees who set wellness goals for themselves and achieve them.

I had one client who installed an on-site gym, but often the wellness committee can organize lunchtime walks or perhaps negotiate a company discount at a local gym as low-cost alternatives. In any case, it is important to stay with the program, because the results are realized over time — as are the long-term benefits for the employees and the company.

What role can my insurance broker play?

Your broker will have a variety of plans for you to choose from, including those available through your health insurance carrier or as standalone programs. It can also provide you with information about free sources of information about employee wellness.

BRENDA FAGAN JOHNSON is an employee benefits specialist with Westland Insurance Brokers. Reach her at (619) 641-3234 or