Employers Control Health Care Costs with Wellness Initiatives

May 9, 2012 (PLANSPONSOR.com) - Seven in 10 American employers offer wellness initiatives, according to the International Foundation of Employee Benefit Plans’ survey "Wellness Programs and Value-Based Health Care."

While wellness programs have existed for decades, their prevalence has grown significantly over the past 10 years. Nearly 60% of American employers implementing new wellness programs since 2008; 23.7% have started offering them since 2010. Additionally, nearly two-thirds of organizations increased their wellness budgets in the last five years.  

The survey suggests a definite decrease in health care costs when wellness initiatives are offered, according to the 21.6% who have analyzed return on investment. Of the organizations that are analyzing ROI, 83% indicated a positive return. For every dollar spent on wellness initiatives, most organizations see between $1 to $3 decreases in their overall health care costs.   

According to the survey, the most prevalent reasons that organizations provide wellness initiatives are to help workers enjoy better overall physical health (45.6%) and to control health care costs (39.8%). Of the respondents who presently do not have wellness programs but plan to implement them within the next 12 months, 50.7% cite controlling health care costs as their motivation for adding the initiatives.  

Screening and treatment programs including flu shots (85%), health risk assessments (79.9%) and smoking cessation programs (67.5%) are some of the most popular wellness initiatives offered. Employers also make available fitness and nutrition programs such as walking/fitness challenges (58.6%), weight loss/management programs (52.5%), nutrition counseling (39.6%) and on-site fitness centers/equipment (36.4%).

“One measure of success for a wellness program is the participation rate,” said senior information/research specialist Julie Stich. “Organizations will not realize benefits unless there is sufficient participation.”  

The survey found that the wellness initiatives with the highest participation rates are: 

  • Flu shot programs (49.6%); 
  • Health screenings (48.8%); 
  • Health risk assessments (48.2%); and  
  • Health fairs (44.7%). 

Nearly 90% of the organizations surveyed provide incentives to increase participation in their programs. The incentives that are most often tied to health risk assessments, health screening and fitness programs include: 

  • Gift cards and gift certificates (38%); 
  • Insurance premium reductions (36.7%); 
  • Non-cash incentives – e.g. prizes and raffles (30.9%); and 
  • Cash rewards (26.9%). 

Employers are often assisted in developing or managing their workplace wellness programs; more than 85% of the survey participants use an outside vendor such as an employee assistance provider or wellness consultant to implement or assist with the program.   

"Wellness Programs and Value Based Health Care," Third Edition can be purchased by calling (888) 334-3327, option 4 or visiting www.ifebp.org/wellnessprograms.