According to the Wellness Council of America (WELCOA), the majority of health care costs are spent treating preventable chronic conditions. Depending on the health of your employees, this can add up to huge costs for you and your workers. Targeting and helping prevent chronic conditions among your workforce can significantly reduce your health care costs. To increase overall employee health and well-being and achieve these cost savings, many companies are creating wellness programs. As with any major business initiative, the driving factor in developing and maintaining a wellness program is getting a strong return on investment (ROI). If your program is successful, your employees will become healthier and you will have fewer medical claims and expenses. In addition, if you are self-insured, dollars saved from your wellness program go straight to your bottom line. If self-insurance is not an option for your organization, you can inform your insurance company of your wellness efforts and successes in an attempt to get a lower premium.

In addition to rising health care costs, absenteeism and presenteeism also affect employer profits. Employees are generally physically absent from the worksite due to stress, illness, family obligations or personal issues. Presenteeism refers to employees who show up to work but cannot fully focus on their tasks due to being sick, sleep-deprived or distracted by personal problems. Wellness programs can address these issues by helping to lower stress, prevent illness, reduce sleep deprivation and increase employee morale.

If you know how much you are spending on health care, you can easily get a rough estimate for how much you are spending on absenteeism and presenteeism with the following calculations:

  • Absenteeism: 0.2 x annual health care cost
  • Presenteeism: 1.8 x annual health care cost

A recent report in Health Affairs, a health care policy journal, suggests that workplace wellness programs can a yield substantial ROI, both in terms of employee health and the employer budget. The report, which examined and compared dozens of previously published studies, found that for every dollar spent on wellness, medical costs dropped an average of $3.27 and absenteeism costs fell $2.73. If developed and implemented effectively, your company could achieve similar ROI on your wellness initiative. 

What Yields the Best ROI?

There are many strategies that companies can implement to increase the ROI of their wellness programs and benefit both the company and its employees.

Utilize Your Insurance Plan to its Fullest

  • Your insurance plan is required to provide free preventive care benefits for members, spouses and dependents, such as cancer screenings, Pap smears, PSA tests, mammograms, annual physicals and routine immunizations. These benefits cost employees nothing and can help catch conditions early and prevent future costly claims.
  • Communicate these benefits to your employees effectively so they take advantage of them. To do so, send age-appropriate reminders, provide vaccination sign-ups for employees and have outside vendors come in-house to provide screenings. While communicating with employees, keep messages positive and constructive by reinforcing how preventive care will improve their health and help lower future medical bills—and be sure to emphasize that it is free.
Budget for a Wellness Program
  • During the next open enrollment, raise your employee benefits cost by $100 to $200 per employee for your wellness budget. As an incentive for participation, allow employees to earn back their $100 to $200 (in cash, premium decreases, gifts, etc.)
Create a Targeted Plan
  • Identify the biggest problem areas among your employees. Do you have a lot of smokers? Is a large percentage struggling with obesity? Perhaps there is a high rate of diabetes or high blood pressure? Choose the areas with the highest prevalence rates to create your initial programs. Keep in mind you can always add more programs later, once your program has been launched.
  • Ask employees what would benefit them the most. Would they be likely to use on-site fitness facilities? Would they prefer discount programs for local gyms? Do they want more education on healthy eating and exercising? Tailor your program to fit your employees’ needs, and they’ll be more likely to participate and see results.
Make Worksite Modifications and New Policies
  • Implement changes in your workplace to promote healthy living, such as a ”Take the Stairs” program, offering healthy vending machine choices, deterring employees from drinking soft drinks and starting a walking group during lunch.
  • If you plan annual company outings, consider adding a fitness component, such as offering a 5k run/walk or company softball game.
Communicate “What’s in it for Them” to Increase Participation, Morale and Employee Engagement
  • Instead of emphasizing how your wellness initiatives will benefit the organization, stress the benefits of the program for your employees. Send out positive messages such as: “You will feel better,” “You’ll have more energy to play with your children” or “You’ll lower your future health care costs.”
Utilize Free Community Resources
Make the most of community resource offerings from nonprofit organizations, your county health department, chamber of commerce, health care providers and city government. These entities can provide resources for company-hosted wellness events. Some of these will provide wellness grants to promote their services and benefit local businesses.

Continue to Support and Evaluate Your Program 
In order to have an effective wellness program, you need to make an effort to sustain and support it. You should have a team responsible for managing the program, and you must budget to keep supporting it financially. ROI generally does not occur until two to three years into the program, so it is important to remember that and remind upper management in order to maintain executive buy-in.Periodically evaluate your current program. Survey employees to see if they’re satisfied, or what changes they might like to see. Look for ways to increase participation or further the initiatives you’ve put in place.

Use the above tips to increase your wellness program ROI. Your employees’ health and morale will improve, and you will save on health care costs.