Why More Employers Are Investing in Well-Being in 2016
Workplace Wellness Workplace wellness programs are a $6 billion industry in the U.S., and many say that’s money well spent.
“Employers pay for half of the health care costs in this country,” says Cathy Kenworthy, the president and CEO of Interactive Health, the nation’s largest provider of employer-sponsored wellness programs. “There’s a huge interest employers have in being able to marshal effective, proactive strategies around managing health care costs.”
According to the RAND Wellness Programs study of 6,000 employees from seven employers, companies screening employees for health risks see a $1.50 return on investment (ROI) for every dollar they put into the program.
The wellness programs effectively address chronic health issues, such as management of diabetes or high blood pressure, as well as lifestyle management—including smoking, poor diet and lack of exercise. The RAND study found the ROI for disease management is $3.80 while the ROI for lifestyle management is 50 cents.
Value of care
Companies make investments in preventive care hoping to reduce health risks and save on future costs. Since many people are unaware of their health risks, these types of screenings help employees learn about their general health—their blood pressure, cholesterol and blood sugar levels. If any of the results are abnormal, the employees are encouraged to follow up with their doctor.
“'We want to develop a culture of wellness, a culture of care,' says Ann Leyva Gratz, vice president of human resources for David’s Bridal."
“We want to be a catalyst to help people understand a little more about where they are, help them be empowered and informed for that conversation with their physician,” says Kenworthy, explaining that wellness programs don’t diagnose or treat.
Culture of wellness
Employers across the country are embracing wellness programs as a way to reduce costs and invest in the health and happiness of their employees.
“We want to develop a culture of wellness, a culture of care,” says Ann Leyva Gratz, vice president of human resources for David’s Bridal, a retailer with over 330 locations in the U.S., Canada and the U.K. Currently half of David’s Bridal employees are involved in the wellness program, which started in 2010.
“It has been extremely well received and has resulted in about a million dollars in savings in medical claims costs year over year,” says Leyva Gratz, explaining the screenings have led to preventive care, which has lowered the incidence of emergency room visits.
While the wellness program is voluntary, the company offers incentives. David’s Bridal rewards each employee $300 a year for achieving a health goal like losing weight. Employee spouses are also eligible for $300 for meeting a health goal.
“Our goal was to offer substantial savings to our associates as well as to decrease employee turnover, sick days and presenteeism, which is when people come to work sick,” says Leyva Gratz. “We want to send a clear message to current and prospective employees that we care about you and your health.”
Saving more than money
Central Ohio Transit Authority (COTA) has had a wellness program since 2012. Over 80 percent of their employees participate. COTA’s wellness program provider does a 34-panel blood screening for conditions, such as nicotine, LDL cholesterol, glucose and triglycerides.
“A lot of health factors are choice-driven and if people are aware of these items and change their behaviors, they can potentially overall lower costs on their health insurance,” says Kristen Treadway, COTA’s vice president of human resources and labor relations, explaining employees who meet their yearly health goals get reduced insurance rates. COTA’s insurance rates went down 8 percent, resulting in a nearly $1 million in savings.
“If we can save one life with this program, it’s positive,” says Treadway, noting wellness plans also boost employee morale. “We know we’ve done that.”
COTA has wellness initiatives for employees including an on-site dietitian, yoga classes and Weight Watchers.
Employees are getting more familiar with wellness programs and are starting to expect it as part of their compensation. That’s according to a survey report from the Society for Human Resource Management, which found over two-thirds of survey respondents saying wellness initiatives were “somewhat effective” or “very effective” in reducing health care costs.
Furthermore, three-quarters of respondents said the initiatives were “somewhat” or “very effective” in improving employees’ physical health.