Considering 60% of U.S. residents under the age of 65 are covered by employer-sponsored health insurance, it isn’t surprising to learn that it’s employers who finance a large portion of the nation’s health care costs. In an attempt to reduce this financial burden, there’s been a significant amount of growth over the years in corporate health improvement programs designed to help employers manage and reduce their corporate health care costs.
According to a recent employer survey conducted by Fidelity Investments and the National Business Group on Health (NBGH), corporate employer’s plan to spend an average of $594 per employee on wellness-based incentives within their health care programs this year. This equates to an increase of 15% from the average $521 reported for 2013, and is more than double the average of $260 reported five years ago. Additionally, the survey found that most companies view wellness programs as an essential part of their benefits program, with 95% of companies planning to offer some kind of health improvement program for their employees. As a result, organizations offering incentives to participate in these initiatives has jumped from 57% in 2009 to 74% in 2014. This can in part be attributed to the implementation of the Affordable Care Act earlier this year, which authorizes grants to small businesses that launch comprehensive wellness programs.
However, the main reason for this shift in increased offerings of incentive programs is that they unquestionably make business sense. As highlighted in a 2010 study published in Health Affairs, “medical spending falls by $3.27 for every dollar spent on promoting employee wellness,” while the cost of absenteeism “drops by $2.37 per each wellness dollar spent.”
So what exactly are companies offering in their wellness programs? Understanding that 75% of total U.S. health spending today is spent on people with chronic diseases, the most popular programs focus on lifestyle management and prevention. This includes promoting physical activity, eating healthier, weight management, and stress management. Other popular options include disease/care management programs, lifestyle-management services, health-risk management services, and environmental enhancements.
There is, however, a lack of data to determine which programs are most effective. It’s important to understand here that best practices can only be established if corporations commit to rigorously measuring the results of their wellness efforts. In order to achieve significant savings of any kind, wellness programs must be based on measurable evidence.
It’s encouraging to see companies take more responsibility for creating a healthier, more productive workforce. As the use and measurement of corporate wellness programs continue to evolve, it has become clear that many employers understand the value of wellness-based incentives in their company plans. Ultimately, and as stated by Helen Darling, president and chief executive officer of NBGH, “it’s obvious that wellness programs not only play a key role in many corporate health care plans today, but they’ll continue to be an integral part of the corporate benefit programs in the future.”
Fidelity (February, 2014). Health Care Survey Finds Spending on Corporate Wellness Incentives to Increase 15 Percent in 2014. Retrieved May 22nd, 2014, from Fidelity.
Lavizzo-Mourey, R. (May, 2013). Your Employees’ Health is Your Business. Retrieved May 22nd, 2014, from LinkedIn.
Miller, S. (February, 2014). Spending on Wellness Incentives Up 15% in 2014. Retrieved May 22nd, 2014, from Society for Human Resource Management.