The financial evidence supporting the
return on investment for wellness programs is growing. Recent studies show that the medical care costs for people with chronic diseases account for more
than 75 percent of the nation’s total medical care costs. In addition to incurring the
direct costs of higher premiums, employers lose more than 39 million employee
workdays each year just due to obesity-related illnesses. For example, according
to the Centers for Disease Control and
Prevention, people with diabetes lose 8.3
days per year from work, accounting for 14
million disability days compared to 1.7
days for people without diabetes.
Perhaps the most impressive statistic of
all is the ROI achieved by employers who
invest in employee wellness programs.
According to Michael Pondrom, employee
benefits specialist with Westland Insurance Brokers, on average, employers are
saving between $1.50 to almost $5 in premiums for every dollar they invest in these
programs. The key to actually realizing the
savings is getting employees to act.
“True employee engagement results from
increased focus on communication and,
perhaps more importantly, incentives,”
Pondrom says. “Since half of Fortune 500
companies offer wellness programs, it’s
perceived to be a luxury that only large
employers can afford, but fortunately, it’s
possible for mid-sized employers to also
offer this benefit without significant
expense by outsourcing the design and
administration of the program to an insurance broker.”
Smart Business spoke with Pondrom
about how CEOs can achieve a next-level
employee wellness program without the
associated costs.
What evidence exists that CEOs will achieve
ROI by investing in employee wellness programs?
For starters, more than 80 percent of
chronic disease is preventable. So if
employers can help to prevent the disease,
they prevent most of the related direct, or
hard, and indirect, or soft, costs. As an
example, all of the research I’ve read indicates that an employee who controls his or
her diabetes costs an employer only $24 in
monthly health care premiums versus $115
in premiums for diabetic employees who
don’t control the disease.
What constitutes a next-level employee wellness program?
Taking your wellness program to the next
level of engagement is really a three-step
process that can be facilitated by your
insurance broker: Identify the risks, educate your employees and, most importantly, offer incentives.
The first step is to review the potential
risks posed by the specific demographics
of your employees. The most efficient and
accurate way to accomplish this would be
to first review your company’s claims data
for clues. As an example, in reviewing the
claims data for one of our clients, it
became evident that they had an above-average incidence rate for cardiovascular-related claims among employees. As a
result of the findings, we scheduled an on-site health fair for the employees, offering
free screenings for early signs of cardiovascular disease through a specialized cardio-assessment firm. Many employees
were unaware that they were at risk for
cardio disease, and the screenings provided them with both the information and the
incentive to take action and to make
lifestyle changes.
Broker-coordinated health fairs are also
an excellent avenue to reach out to those
employees already diagnosed with a disease who just need information on how to
enroll in a program.
How does employee education play a role in
achieving engagement?
Education is an ongoing and critical element in any successful wellness program.
There are numerous sources of free information that help employers achieve awareness among employees. The goal is not
only to educate your employees on what
programs are available, but also on how to
use them and the advantages of using
them. Your insurance carrier and broker
can provide brochures, posters, online
information sources, payroll stuffers,
newsletters and nurse hot lines. Most of
the materials are free; all you have to do is
request them from your broker.
How do incentives drive employee engagement?
It’s vital that employers offer no-cost or
low-cost incentives to incite employee
lifestyle changes. Some employers are providing subsidized on-site healthy lunch programs or discounted gym memberships.
I’ve seen very effective programs that pay
employees as little as $1 for each pound of
weight they lose. Like any incentive program, the plan must be well communicated
and reinforced in order for it to work.
Which employee wellness program elements
can be outsourced and what does outsourcing cost?
Your broker can implement and administer an employee wellness program that will
not only provide all of the necessary
employee education and on-site health
fairs, but brokers can design, implement
and coordinate low-cost or no-cost employee recognition and incentive plans free
of charge. An employee walking club is an
example of a zero-cost program that your
broker can organize for you; low-cost programs that engender employee engagement include bonuses for weight loss and
personalized coaching programs that average $4 per month per employee. All
employers can impact their bottom line by
driving employee engagement toward wellness, and it doesn’t require any additional
internal staff time when they outsource.
MICHAEL PONDROM is an employee benefits specialist at
Westland Insurance Brokers. Reach him at (619) 641-3241 or
[email protected].