REPOST ARTICLE SOURCE: http://www.shrm.org/hrdisciplines/benefits/articles/pages/costs_wellness.aspx
Seven in 10 American employers offer wellness initiatives—such as flu shots, health screenings and weight management programs—that are directly attributable to improving the lives of their employees and reducing health care costs, according to the International Foundation of Employee Benefit Plans’ 2012 survey Wellness Programs and Value-Based Health Care.
The study measured responses from the foundation’s membership in the U.S. and Canada, including benefits and HR professionals, financial managers and other professionals.
While wellness programs have existed for decades, their prevalence has grown significantly over the past 10 years. Even the recent economic downturn has not slowed their growth, according to the survey, which found that:
• Nearly 60 percent of American employers have implemented wellness programs since 2008.
• Almost 24 percent have started offering wellness programs since 2010.
• Nearly two-thirds of organizations increased their wellness budgets in the past five years.
“Without question, employers are beginning to understand the direct connection that wellness initiatives can have on both employees’ health and health care plan cost savings,” said Michael Wilson, the international foundation’s CEO.
Return on Investment
The survey suggested a definite decrease in health care costs when wellness initiatives are offered, according to the 21.6 percent of organizations that have analyzed return on investment (ROI). Of the organizations that are analyzing ROI:
• 83 percent indicated a positive return.
• For every dollar spent on wellness initiatives, most organizations see $1 to $3 decreases in their overall health care costs.
“Determining ROI can be of great benefit for employers, leading to increased buy-in from organization leaders and workers,” explained international foundation senior information specialist Julie Stich. “However, it’s not an easy process. ROI can be difficult to measure, since health improvement may be influenced by a combination of factors and because it takes an average of three years to see cost-saving results.”
The most prevalent reasons that organizations provide wellness initiatives are:
• To help workers enjoy better overall physical health (45.6 percent).
• To control health care costs (39.8 percent).
Of the respondents that do not have wellness programs but plan to implement them within 12 months, 50.7 percent said their primary motivation for adding the initiatives is to control health care costs.
Screening and treatment programs are some of the most popular wellness initiatives offered, including:
• Flu shots (85 percent).
• Health risk assessments (79.9 percent).
• Smoking cessation programs (67.5 percent).
In addition, employers provide fitness and nutrition programs such as:
• Walking/fitness challenges (58.6 percent).
• Weight loss/management programs (52.5 percent).
• Nutrition counseling (39.6 percent).
• On-site fitness centers/equipment (36.4 percent).
“One measure of success for a wellness program is the participation rate,” said Stich. “Organizations will not realize benefits unless there is sufficient participation.”
The survey found that the wellness initiatives with the highest participation rates are:
• Flu shot programs (49.6 percent).
• Health screenings (48.8 percent).
• Health risk assessments (48.2 percent).
• Health fairs (44.7 percent).
Nearly 90 percent of the organizations surveyed provide incentives to increase participation in their programs. The incentives that are most often tied to health risk assessments, health screening and fitness programs include:
• Gift cards and gift certificates (38 percent).
• Insurance premium reductions (36.7 percent).
• Noncash incentives such as prizes and raffles (30.9 percent).
• Cash rewards (26.9 percent).
Employers often are assisted in developing or managing their workplace wellness programs, the survey found. More than 85 percent of the survey participants use an outside vendor such as an employee assistance provider or wellness consultant to implement or assist with the program.