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04/11/2024
Posted by: Altura Benefits in Insurance
In theory, employee wellness programs improve employee health, which may lead to high productivity and lower healthcare costs. There’s just one catch: wellness programs won’t work unless employees participate in them. To achieve a good return on your investment, you need to boost participation in employee wellness programs.
It’s hard to do your best work when you’re not feeling well. According to research from Brigham Young University, health-related employee productivity loss accounts for 77% of all employee productivity loss. Certain bad habits were linked to especially high drops in productivity. For instance, employees who:
The BYU study also found that employees who didn’t think their workplace would support them to become healthier were more likely to experience a decrease in productivity. It’s not just physical health that impacts productivity – mental health problems may also make workers less effective. According to the American Institute of Stress, stress reduces productivity and hurts profits by fueling absenteeism, disengagement, unhappiness, loss of innovation, decreased focus, decreased resilience, and turnover. In fact, research shows that stress is responsible for 40% to 63% of workplace turnover.
The CDC says healthier employees are generally more productive. Workplace health programs increase productivity by reducing absenteeism and presenteeism. Since healthier employees are less likely to call in sick or use their vacation time due to illness, companies that support workplace health have a higher percentage of employees at work every day. For example, overweight and obese men miss an average of two additional workdays each year compared to men of a normal weight. Those missed days add up to a lot of lost work, especially when a significant portion of the workforce is unhealthy. To fight these productivity losses, many employers have invested in wellness programs. The KFF 2023 Employer Health Benefit Survey found that 80% of large firms and 62% of small firms offer at least one wellness program designed to help workers stop smoking, help employees lose weight, or provide lifestyle or behavioral coaching. Employers are also focusing on mental health – Wellable Labs found that 90% of employers were increasing investments in mental health programs. Deloitte says large organizations spend an average of $10.5 million a year on wellbeing programs, including exercise incentives and stress-reduction apps.
Since employees spend a significant amount of their time at work, their workplace habits have a major impact on their health. If employers encourage their workers to eat healthier, exercise more, and smoke less, they should be able to foster a healthier workplace, which should boost productivity and reduce healthcare costs. Harvard Business Review says Johnson & Johnson saw an ROI of $2.71 for every wellness dollar spent between 2002 and 2008. This helped the company save $250 million on healthcare costs. Unfortunately, companies that invest in wellness don’t always see this level of return. A study from an Oxford researcher found little evidence that mental wellbeing interventions (such as mindfulness and stress management) provided benefits.
The stakes are high. Employers are pouring lots of resources into wellbeing programs and are counting on results that will improve their productivity, reduce their healthcare costs, and boost their profits. To see such benefits, employers need to encourage participation, which they can achieve in five main ways.
The most direct way to encourage participation in wellness programs is to offer incentives. However, employers need to be mindful of regulations, including ERISA, ADA, ACA, GINA, and HIPAA. According to SHRM, the ACA amended HIPAA to allow employers to offer incentives of up to 30% of the total cost of an employee’s health insurance premiums for self-only coverage to encourage participation in certain wellness programs. For tobacco cessation programs, the incentive cap is 50%. However, these rules have led to some debate. In 2016, after the EEOC issued regulations that aligned with the ACA rules, it was sued by AARP over alleged conflicts with ADA and GINA protections. Since then, new rules have been proposed and withdrawn. This issue may continue to evolve.
To maximize the ROI of your wellness program, you need to develop the program with the needs of your workforce in mind. Let’s say you want to offer a tobacco cessation program because you’ve seen how much tobacco use increases healthcare costs. However, if only a small percentage of your workers smoke, participation will be low. Alternatively, your workforce may have more vapers than smokers, who may not participate if they’re unsure the program will help them. Accessibility is another issue. Let’s say weight gain is a common problem at your company, leading you to create an exercise program for the mornings. Many of your workers want to participate but can’t due to issues with childcare. In this case, a program for later in the day (such as walking meetings) might be a better fit.
Imagine investing millions of dollars into the development of a new product and then launching it without any advertising. No matter how good the product is, it would most likely flop because people wouldn’t know about it. The same goes for a company’s wellness programs. To increase participation, employers need to build enthusiasm. This may involve raising awareness, highlighting the benefits, and issuing reminders. Company leaders can also help by talking about the programs and encouraging employees to use them.
Physical and mental health issues tend to be quite personal. Some people may not want to participate in wellness programs due to embarrassment. They may even worry the company will use the information against them, especially in regard to sensitive mental health issues. Employers should use messaging to reduce stigma and encourage workers to seek help, while emphasizing they will keep information confidential.
Despite your best efforts to encourage participation, you may not see the results you want. Plus, participation levels may drop over time. This doesn’t mean you need to abandon the wellness program entirely, but it may mean you need to make some adjustments.
Boosting participation in employee wellness programs may be one way to take control of your healthcare costs and improve employee engagement. However, it’s only one aspect of a successful employee benefits program. Altura Benefits can help you craft an employee benefits package that meets your needs and budget. Learn more.