According to the Wellness Council of America (WELCOA), the majority health care costs are spent treating preventable chronic conditions. Depending on the health of your employees, this can add up to huge costs for you and your workers. Targeting and helping to prevent chronic conditions among your work force can significantly reduce your health care costs. To increase overall employee health and well-being and achieve these cost savings, many companies are creating wellness programs. As with any major business initiative, the driving factor is getting a strong return on investment (ROI) in developing and maintaining a wellness program. If your program is successful, your employees will become healthier and you will have fewer medical claims and expenses. In addition, if you are self-insured, dollars saved from your wellness program go straight to your bottom line. If self-insurance is not an option for your organization, you can inform your insurance company of your wellness efforts and successes in an attempt to get a lower premium.
In addition to rising health care costs, absenteeism and presenteeism also affect employer profits. Employees are generally physically absent from the worksite due to stress, illness, family obligations or personal issues. Presenteeism refers to employees who show up to work but cannot fully focus on their tasks due to being sick, sleep-deprived or distracted by personal problems. Wellness programs can also address these issues, by helping to lower stress, prevent illness, reduce sleep deprivation and increase employee morale.
If you know how much you are spending on health care, you can estimate how much you are spending on absenteeism with the following calculation: 0.2 x annual health care cost, and presenteeism with the following calculation: 1.8 x annual health care cost.
A recent report in Health Affairs, a health care policy journal, suggests that workplace wellness programs can a yield substantial ROI, both in terms of employee health and the employer budget. The report, which examined and compared dozens of previously published studies, found that for every dollar spent on wellness, medical costs dropped an average of $3.27 and absenteeism costs fell $2.73. If developed and implemented effectively, your company could achieve similar ROI on your wellness initiative.