Proof of the ‘Wellness’ ROI is Growing

Although medical and human resources experts have been touting the benefits of “wellness” for decades, for many employees the concept remains a vague combination of fitness and nutrition—certainly nothing concrete enough to drive workplace policy. But a growing body of research is showing concrete, bottom-line results.

For example, workplace wellness programs generate a return on investment of $4 in health care costs and $5 in reduced absenteeism for every dollar invested within three to five years of the program launch, according a study cited in HRM Magazine’s third quarter 2009 issue.

Although quantifying the effect of wellness has always been difficult, the concept behind it is simple: Keeping employees healthy is better and cheaper than treating and paying for health issues later.

Start by creating or enhancing an employee wellness program. Consider including:

  • Weight loss programs
  • Gym membership discounts or on-site exercise facilities
  • Smoking cessation program
  • Personal health coaching and classes in nutrition or healthy living, and
  • Web-based resources for healthy living, or a newsletter.

Incentives get results, but watch for the 20 percent rule
Premium reductions, followed by merchandise/tokens and gift cards, are the most common incentives to join a wellness program, according to a July 2009 report by health industry consultants, Health2 Resources.

Less than half of Johnson & Johnson employees participated in an annual health risk assessment program before the company began offering a $500 discount on health care premiums. Now, 90 percent of the company’s employees participate.

Johnson & Johnson, which has 114,000 employees worldwide, clearly believed in the value of health risk assessments, which help determine areas of concern and identify which programs would be best for employees.

While incentives have proven to increase participation, don’t go too far. According to the U.S. Department of Labor’s Wellness Program Analysis issued Feb. 14, 2008, the total reward for combined, standard-based programs can’t exceed 20 percent of the cost of the total (employer plus employee) health care plan premium. So, a $10,000 annual family health care premium can’t provide more than $2,000 in wellness program incentives. In addition, cash gifts or gift cards are taxable, according to the IRS.

Keep your wellness program fresh and measure results
Implement regular promotions to stimulate your employees’ desire to exercise, eat healthy, and improve their health.

Involve employees by creating a wellness committee or team that can work with you to generate talk and encourage a healthy lifestyle. There’s nothing better than peer encouragement. Show that your credit union is serious by making wellness program costs a specific item in your annual budget.

You should understand that wellness programs can take a few years to show quantifiable results, and staff turnover and other factors can significantly affect the outcome. But once your wellness program is running, work with your HR staff to answer some key questions:

  • Are people participating and achieving their goals?
  • Are you paying fewer or less costly claims?
  • Are prescription costs or usage down?

Better health is a reward in itself, but a successful wellness program can compound the reward with a healthier bottom line.

Mike Evert ( is group benefits brokerage product manager for CUNA Mutual Group. CUNA Mutual Insurance Agency is a subsidiary of CUNA Mutual Insurance Society and is the marketing agent licensed to broker employee benefit products. CUNA Mutual Insurance Society underwrites Group Life Insurance, Short Term Disability Income Insurance and Long Term Disability Income Insurance.

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