Corporate Wellness Programs

Health promotion programs are a long-term investment. But how long should you wait for results?

Finance and the CEO want hard numbers to show ROI.  And wellness ROI is tougher to calculate than, say, a 401(k).

18-month guideline

Recent studies have established some benchmark data on wellness Return On Investment (ROI) you are able to use as a guideline. It’s useful whether you already have a health promotion program or are thinking about starting one.

It ordinarily takes at least 18 months from the launch of a wellness program to see any causes your healthcare plan bottom line.

For many firms, 18 months is the point at which workers’ bettering health begins to cancel out the cost of sponsoring and administering the health promotion program.

By and large, the long-term cost savings from a wellness program are going to be driven by how much you’re willing to spend. Normally, corporations get what they pay for – both in time and money invested.

As a rule of thumb, the typical cost to the employer is about $3 to $5 per participating worker per month. Within three years of launch, you should be seeing significant savings.

The typical Return On Investment (ROI) tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term for achieve the long-term savings?  and how can you maximize the long-term payoff?

Consider making wellness programs budget-neutral

For a lot of companys, the most effective way to manage the cost of a health promotion program in the start-up phase is to make it a budget-neutral expense.

In other words, the health promotion program neither adds to your health costs at the outset, nor lowers them. Example –  You plan to roll out a health promotion program effective Jan. 1.  The health promotion program will cost the business $5 per employee.

You can roll the $5 per month cost directly into the employee’s monthly share of their healthcare premium. In this age of continuous cost-shifting, most workforce are used to seeing small increases in their monthly contributions each plan year.

Just be sure you’re not hitting folks with a big hike on top of that $5. Comparably designed wellness programs pay off about the same – meaning personnel purchase in and participate at the same rate – whether they’re budget neutral or the business absorbs the cost.

But when workforce get clobbered by large-scale contribution hikes at the outset, they often resist the health promotion program.  The long-term Return On Investment (ROI) for these health promotion programs is usually disappointing.

If you’re faced with a situation where achieving a budget-neutral health promotion program would cause push-back, your firm is better off absorbing most or all the wellness costs.

The largest hurdle is to get over the hump for those first 18 months or so.