The cost of wellness programs, which are designed to improve or maintain employee health in order to ward off the need for more expensive medical care, depends on the width and scope of services offered.
Most employers offer annual check-ups and screenings based on the United States Preventive Service Task Force guidelines – a smart move. And the screenings should be covered 100%, so employees are more likely to use them.
The key to getting the biggest bang for your buck in your wellness program is to focus on a few tried and tested offerings that studies have found result in better health for employees and reductions in your overall health care insurance costs.
The following are the top wellness offerings by participation rate, according to a study but the International Foundation of Employee Benefit Plans:
- Flu shot programs, 50%,
- Health screenings, 49%,
- Health risk assessments, 48%, and
- Health fairs, 45%.
The survey found the incentives most commonly provided to employees by organizations to participate in health risk assessments, health screening and fitness programs included:
- Gift cards and gift certificates, 38%;
- Insurance premium reductions, 37%;
- Prizes and raffles, 31%; and
- Cash rewards, 27%.
To save money employers should skip providing costly physical exams, which include blood tests, EKGs and X-rays. They can amount to an unnecessary expense of $300 to $400 per employee. The fact is, the average healthy employee doesn’t need such a service on an annual basis. That money is better spent on a wellness program that works.
Choose what works best
A company has two choices when it comes to implementing a wellness plan for employees. It can do it internally, or hire a vendor for the job.
The ballpark cost per eligible employee should be around $100 to $150. That should pay for program and administration costs such as a wellness practitioner’s salary or the cost of a vendor contract.
Doing a wellness program in-house has the advantage of being able to customize a program to the specific needs of your company’s employees.
They are also less expensive, as well-qualified people in-house can do the job for much less than what a vendor or contractor will charge for the same work. In-house programs also offer a staff development and organizational team-building opportunity.
But some employers are better off hiring a wellness program vendor to do the job. Vendors have systems to deliver programs effectively as well as monitor their outcomes.
And if the vendor works out, it’s easy to renew their contract, or fire them if they fall short.
Vendors may charge either a flat fee for each employee or one for each program participant. The former works well for employers since it holds the vendor accountable for improving health for a fee.
For $100 to $150 per employee in a wellness program, you should expect a high participation rate – greater than 50% – and health risk appraisals for every participant.
You should also receive feedback and follow-up on ongoing intervention programs for you employees during the year.
Also, you should see the creation of a referral mechanism to connect employees to community resources for individualized services, such as fitness programs, Weight Watchers and stress management and tobacco cessation.
Getting your ROI’s worth
So how do you know if you’re getting your money’s worth? Typically, the average return on investment is about $3 for every $1 invested.
So, if you’re spending between $100 and $150 per employee, you can expect savings of $300 to $450 per year.
That usually doesn’t get rolling, however, until about three years into the program.