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The Pros and Cons of Implementing an Employee Wellness Program

  • By:
  • Alliance Insurance Group
  • |
  • Jun. 27th, 2016

With $2 billion being spent annually on workplace wellness programs in the United States, employers are beginning to ask the question: are they worth it? Employee Wellness Programs gained visibility after Safeway publicized its success story in 2009. Shortly after, an amendment was made to the Affordable Care Act, allowing employers to reimburse employees up to 30% of their health-insurance premiums in exchange for participation in corporate wellness programs. The idea is that a wellness program--complete with gym memberships, smoking cessation incentives, or even psychological counseling- -will result in greater employee productivity, a happier workforce, and a better bottom line. But the jury is still out.

Although a corporate wellness program might seem like the answer to a sluggish or unmotivated workforce, it’s still unclear whether they really work. If you’re thinking of implementing an employee health program in your workplace, here are some of the main pros and cons to consider.

The Pros

Programs focus on healthy lifestyle decisions and chronic disease prevention - - Things like health coaching, medical screenings, weight management programs, and fitness programs can greatly improve health and employee wellness. Disease prevention and a focus on healthy lifestyle choices can also lead to lower health insurance costs.

The positive ROI can be huge – Some studies show how the savings on medical and absenteeism costs can return $2-$3 for every $1 spent on wellness programs. Other important studies show even stronger results. Programs have shown improvement in worker moral, attitude, productivity, attention and motivation due to the benefits of healthy exercise and eating habits. Additionally, as we all know, a happier workplace is likely to attract better talent.

The Cons

It can be costly -- According to a New York Times article in 2014, the cost of wellness programs for medium-to-large employers is $521 per employee, double the amount of just five years ago. Many organizations simply don’t have the budget to accommodate an extensive program.

Potentially discriminatory -- Critics of mandatory wellness programs and health screenings argue that those who are already unhealthy may feel embarrassed or excluded if they don't participate. Similar feelings have been reported when employees do participate and receive negative results on screens and tests. Additionally, some employees may see health initiatives or inquiries as an invasion of privacy. Difficult to prove effectiveness -- The same 2014 New York Times article argues that the true effectiveness of a corporate wellness program is hard to measure and there aren’t yet enough data points to draw conclusions. Critics argue that human health is a very complex subject, and outside factors in employees’ personal lives can interfere with results and make it difficult to prove causation.

Take away: Consider the overall health and morale of your employees. If you think there's cause for concern, look into the best wellness programs that are affordable and within your company’s budget. Understand that implementing an Employee Wellness Program may not result in immediate financial returns, but the effect on the health, well-being, and productivity of your employees might well be worth the investment. Stay tuned to our blog and Knowledge Center for more workplace topics and guidance. Have a question for one of our insurance specialists? Don’t hesitate to reach out to us

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