An employer's health care expenditures are strongly affected by the overall health of the workforce. One workforce wellness index estimated that unhealthy employee behaviors cost employers about $670 per employee each year.
The index tracked collective health by considering six behavioral risk factors, including blood pressure, cholesterol, blood glucose, body mass index (BMI), and alcohol and tobacco use. The research also measured the costs associated with less-than-optimal health.
The index showed a measurable decline in ideal health, which is a major contributor to rising health care costs for employers. The six behavioral risks were associated with roughly 14% of direct health care costs among the working, privately insured population.
Of the average $670 per employee that unhealthy behaviors cost employers, about $400 was attributed to high BMI and $150 to elevated blood glucose. A separate study found a clear relationship between Workers' Compensation claim costs and BMI, with higher average claim costs for obese workers compared with workers of average weight.
Given these findings, employers looking to reduce health care costs should confront behavioral risks in their workforce and compare beneficiary measures against national norms to identify problem areas and set priorities. For guidance on broader plan design and measurement, see Transforming Health Benefits Programs.
Survey highlights
- Of respondents, 76% felt it is appropriate for companies to provide incentives for employees to improve well-being and health.
- If offered an incentive, 73% of respondents said they would enroll in their employer's wellness program to improve their personal health.
- Only about a third of respondents reported working for an employer offering initiatives such as wellness coaches, fitness programs, or on-site health screenings.
Public health data indicate that lifestyle choices drive a large share of productivity losses and health care costs for employers. Workplace wellness programs have been shown to improve employee health and help a company's financial bottom line.
Employers that offer structured wellness programs can see cost savings over time; for more on program options and implementation, see Workplace Wellness Programs and Employee Health.
Although wellness benefits are clear, participation is low when no incentives are offered. Employers have been increasingly offering rewards and incentives to encourage enrollment and sustained healthy behavior, and some studies show per-employee wellness incentives have increased substantially in recent years.
If you need help designing incentives or choosing program options, ask an agent.
Frequently Asked Questions
How much can employers expect to save from a wellness program?
Savings vary by program design and employee participation, but many employers report lower health care costs and reduced absenteeism over time when wellness programs are well implemented.
Which employee risk factors should employers prioritize?
Common priorities include high BMI, elevated blood glucose, high blood pressure, tobacco use, and high cholesterol because they are strongly linked to health care costs and productivity loss.
How can employers boost participation in wellness programs?
Offering meaningful incentives, making programs convenient, and providing coaching or screenings can increase enrollment and long-term engagement.
Are wellness programs appropriate for small employers?
Yes. Small employers can start with low-cost actions such as health screenings, education, and incentive-based programs, and scale up as participation grows.