Corporate Wellness Programs

When it comes to health promotion programs, it may be tough to get past all the hype. Here is how to avoid the three most common traps companys fall into.

Trap #1.  The “one-size-fits-all” approach

For good reason, your company does not simply copy other firms’ 401(k) plans or compensation designs. Yet, all too often, firms adopt ill-fitting wellness programs based on things that have worked elsewhere.

Your CFO might have seen data on the cost savings other businesss have achieved via certain wellness incentives. Or an old coworker of your Chief Executive Officer (CEO) swears by the health promotion program at his or her own firm.

In response, the top brass pushes for a copycat health promotion program – for example, offering use of tobacco cessation incentives.

That might  be a good idea, if tobacco-related illnesses are a key driver of your company’s medical costs. But how can you be sure? is it good enough to have your employees undergo a health risk assessment?

Usually, the answer is no.

Health risk appraisals are a great beginning place, but it’s often a mistake to stop there.  The assessments help you get a feel for what your employees’ baseline physical problems are before you try to design a wellness program around them.

This creates rough outlines of what your wellness program objectives should be and where to target worker programs. If you want the maximum bang for your wellness buck, you’ll have to dig a little deeper for information. Key places to look –

• your organization’s medical-claims breakdown for the last three years

• prescription-drug claims

• employee absence information

• employee assistance program use

• disability claims, and

• staff member demographics (workers’ ethnic, gender, age and dependent coverage status points to greater – and lesser – health risks associated with each category).

Trap #2. Leaving the health promotion program on autopilot

Many wellness programs often get off to a good start and then fizzle out. Employers are left wondering what went wrong. Their mistake –  They failed to revisit the wellness program on an ongoing basis – at least every other year.

Why it’s vital –  Your cost-drivers can easily shift as employees come and go from the corporation.

Example –  This year, emphysema and other smoking illnesses could  be your biggest cost driver. But two years from now, it could be obesity and diabetes.

Unless you continuously track the wellness program and adjust your goals as necessary, you may not be prepared to meet those new challenges.

Trap #3. Unrealistic expectations

Normally, it takes at least a year and a half for companys to break even on the cost of a health promotion program.  As a rule of thumb, the typical program cost per worker per month to the company is about $3 to $5.

If, after three years, you still aren’t seeing results, something went wrong. Currently, the benchmark Return On Investment (ROI) after the third year of a wellness program is $4 to $5 saved for every dollar spent.

How can you manage the cost in the short-term? In many cases, employers pass the cost of the health promotion program on to the employees. for example, let’s say you want to roll out a health promotion program effective January 1 (or no matter what your first day is of the new plan year).

You can roll that $3 to $5 per worker per month cost directly into the employee’s monthly share of their health care premium. That makes the wellness program a budget-neutral expense for your company.

But remember –  You get what you pay for – both in time and money invested.  The less guesswork that’s involved in the planning and execution, the better the chance for success.