Employers are investing more heavily in wellness programs and related incentives as they try to spur employees into more healthy behaviors and lifestyles. However, efforts to gauge the return on these investments are not keeping pace with increases in spending. In fact, if this trend continues, employers will need to keep close tabs on wellness spending to make sure the value of outcomes outweighs the amount invested in these programs.
We have talked before about potential returns on wellness investments and incentives, and the impact of wellness programs and incentives for participating can be considerable. However, employers need to carefully balance their desire to control costs and make smart investments that pay off with the need to provide meaningful incentives for desired behavior. So far, companies have fallen short of tracking results. For example, 76% of companies do not know how much of an impact their wellness programs are having on employee health or their healthcare costs, although 57% state that offering incentives leads to higher than expected success rates, according to an annual survey conducted by Fidelity Investments and the National Business Group on Health.
Even though most companies are not quantifying the impact of wellness programs and incentives, they continue to increase their investment significantly. In fact, the average wellness incentive value has jumped in value considerably in just a couple of years and so has the per-employee cost of wellness programs. Considering the growing amount of money employers are investing in wellness programs, this lack of insight could lead to employers overspending on programs that do not maximize outcomes or investment returns.
Let's take a look at the numbers. Back in 2009, employers paid out an average of $260 per employee for participating in a range of wellness programs, including weight-loss programs; programs designed to help individuals manage specific conditions, such as diabetes and insulin levels; and on-site flu shots. By 2010, the size of these incentives leaped to $430 per employee and then to $460 in 2011. When it comes to the cost of the wellness programs themselves, employers were paying $108 per employee in 2009, $154 per employee in 2010 and $169 per employee in 2011.
|Wellness Program and Incentive Spending 2009-2011|
|Year||Average Incentive||Average Program Cost||Total Cost per Employee|
|Source: Fidelity Investments and the National Business Group on Health|
Overall, 73% of the 139 employers surveyed offer some type of incentive, including cash, gift cards and contributions to health savings accounts. In some cases, employers are tying employee participation in wellness programs to employee eligibility for health insurance benefits.
Last year, 5% of employers required workers to complete biometric testing, such as blood pressure testing and cholesterol screening, and 7% required employees to complete a health risk assessment in order to be eligible for health coverage. This year, 9% will tie eligibility to biometric testing and 10% plan to require health risk assessments.