How Much Does An Employee Wellness Program Cost?
Worksite Wellness is Here to Stay: Here is What An Effective Wellness Program Costs
There are three reasons why employee wellness programs are going to continue to grow in popularity:
1) There is a strong economy where wellness programs flourish.
2) There is more obesity and diabetes now than in any other time in world history.
3) The increasing cost of healthcare is only going to get worse.
Even if the US economy stumbles, the obesity epidemic and cost of medical care will continue to drive the need for wellness programs. At the present time, there is not sufficient political and cultural interest to do much about either one of these.
Virtually all large corporations and many mid-sized companies already have some form of employee wellness in place. These worksites will continue to provide wellness while the real growth in wellness programs will come from small businesses.
Regardless of size all worksites will need to ask these questions;
- What are the benefits of having a worksite wellness program?
- What questions should we ask before we start a wellness program?
- How much should a wellness program cost?
- Do I need help to run an effective wellness program?
What Does It Cost to Have a Wellness Program?
To get a positive return on investment, worksites must implement wellness programs that are comprehensive. A comprehensive wellness program is going to include a health risk appraisal, incentives, culture change, and behavior change campaigns and challenges. It can also include biometric screening and individualized health coaching.
The answer to the question of how much it costs, it really depends on how much you want to offer your employees. I have carefully reviewed all of the results of the published employer surveys and research articles on what the typical cost of an effective wellness program looks like.
Surveys found here, here, and here report that the total cost of wellness program is between $150 and $1200 per employee per year. Obviously, this is a huge range. The reason for the large range has to do with which wellness program options an employer wants to include.
Let me explain all this a little differently. Many wellness vendors (including WellSteps) are offering a comprehensive wellness program that uses a proprietary wellness platform.
These programs typically cost between $3 and $7.5 per employee per month ($36 -$90/ year). This typically includes a mobile app and website that can offer a health risk appraisal, incentive management, online resources, culture change, wellness campaigns and team challenges, and integration of fitness devices. Occasionally this cost will also include some money for simple incentives like gift cards or T-shirts.
WellSteps has over 400 worksites that we currently work with and most of them are getting a comprehensive wellness program for around $36-$90 per employee per year, depending on the size of the company. The larger the company the smaller the cost per year.
This does not include the cost of biometric screening, health coaching or benefits based incentives. These are not automatically included because they are the most expensive parts of any wellness program.
|Biometric screening (blood draw and analysis)||$40-$75|
|Health coaching (6 sessions)||$140-$165|
|Benefits-based incentives||$200-$800 per employee per year|
An effective employee wellness program can cost between $36 and $90 per employee per year. Add biometric screening, telephonic health coaching, and robust incentives including benefits-based incentives and you can see how the cost grows dramatically.
We have found that great participation happens if the employers will establish a benefits-based incentive plan. Benefits-based wellness incentive programs typically include the incentive of a discount on insurance premiums, paid time off, a contribution to an HSA or HRA, or a lower co-pay or deductible.
Benefits-based incentives have a big impact on employee engagement. Some WellSteps clients offer a $50/month discount off the cost of an insurance premium. That’s $600 per year per qualifying employee. Other companies spend more and some spend less than this. According to the Washington Business Group on Health, some employers are now spending $742 per employee per year on incentives.
If establishing a benefits-based incentive is too bold for your worksite consider purchasing other incentives that are not tied to your benefits. Many of our Wellsteps clients have a small wellness budget dedicated to purchasing rewards or incentives for program engagement.
If you are not careful your wellness program can get very expensive very quickly. The more money you spend on the program the less likely you are to get a positive return on investment.
We encourage all worksites to do biometric screening at least once. We also know that the programs with the best outcomes always offer some type of benefits-based incentive. Unfortunately, spending a lot on incentives may not produce the most cost effective outcomes.
The high cost of coaching is also why there are no published studies that show a positive return on investment for health coaching. There is also no evidence of a positive return on investment for wellness programs that have an on-site fitness facility. The cost of these wellness options is difficult to recoup.
The Cost of Wellness Can Be Lower as a Wellness Reseller
Large employers, insurance companies, and brokers who wish to provide wellness programming to many people can reduce the cost by becoming a reseller. Large employers can get access to a robust wellness platform for as little as $10 per employee per year.
Instead of hiring wellness coordinator or WellSteps guide to help you manage your wellness program, you can become a reseller. As a reseller you can get trained to use a robust wellness platform without any professional help.
The reseller model is less expensive because you are agreeing to do all of the heavy lifting and day-to-day management of the wellness program yourself. You can read more about becoming a wellness reseller here. This is a very cost-effective method for those who are delivering wellness to large groups of people.
A Sample Wellness Budget
With this information you can now create a very accurate budget of what your wellness program will cost. First, you have to answer a few questions. Do you want to offer biometric screening to all your employees? Do you want to make health coaching available to all your employees or just a subset?
Are you going to implement a benefits-based incentive plan? These are important questions that you will need to answer before you can complete your budget. Here are some more really important questions you must consider before you start your wellness program.
number of employees= 350
Wellness platform cost per employee per year= $30
$30 x 350 = $10,500
Add in any additional costs for biometric screening, health coaching, incentives, or a benefits-based incentive.
Poor employee health has a direct impact on productivity, morale, and health care costs. Wellness programs improve health. When making the decision to finance a wellness program it is always a good idea to consider the cost of doing nothing. Most companies have found that having a good wellness program will produce a positive ROI and quickly become an important business strategy.