Employers Turn to Wellness Programs to Manage Costs

April 3, 2012 (PLANSPONSOR.com) – Wellness programs are one of the best ways for employers to promote a healthy workforce, contain health care expenses and generate productivity among employees. 

According to a survey from ADP, while 79% of large and 44% of mid-sized companies offer wellness programs, over 60% of these companies do not measure their return on investment. Yet, the majority of mid-sized and large companies report their wellness programs met or exceeded their senior executives’ expectations in regards to reducing overall healthcare costs.

“Wellness programs are employers’ ‘next best hope’ for containing healthcare expenses,” said Tim Clifford, president of Benefits Services for National Accounts at ADP, Inc. “These programs can also increase productivity without the negative impact on employee morale of layoffs or cutting plan options – yet few companies are measuring their return on investment from wellness initiatives.”

The survey also found the majority of companies provide voluntary or incentive-based wellness programs, but 15% of mid-sized companies and 12% of large ones make participation in these programs mandatory.

Reasons that employers cite for offering wellness programs vary. A strong majority (81% mid-sized, 78% large) say they are most interested in improving employee health, closely followed by controlling health care costs. Additionally, one-third or more are interested in attracting and retaining employees and maintaining or increasing benefits offerings. 

Mid-sized companies have been offering wellness programs to employees for about six years and large employers for about six and a half years. An average of 51% of employees in mid-sized companies and 39% of employees in large companies participate in these programs.

Among all companies who offer wellness programs, one-quarter of mid-sized companies and slightly more than one-fifth of large companies measure the ROI of their wellness programs.

A majority of mid-sized companies (53%) and large companies (60%) report that the wellness programs they offered met or exceeded expectations in regards to reducing overall health care costs.  On average, five wellness program components or interventions are offered at mid-sized companies and six at large ones.

Click here to read the full white paper from ADP.