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Wellness Budget Calculator - How This Works

How This Works

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The Wellness Budget Calculator helps you see how to fund an employee wellness program by making small changes to your health plan OR by implementing a health contingent program. Surveys show that the average cost of a wellness program is about $150 per employee per year. The Wellness Budget Calculator will help you find more than enough money to fund an effective wellness initiative.

The first tab of the calculator shows you how small changes in your plan co-pays and deductibles can result in substantial health care cost savings. Here’s how it works: First enter the total amount of money spent on employee health care last year. Enter current amounts for employee copays and deductibles. Now for the fun part. Move the co-pay slider, the deductible slider or both to see how much money you can save by lowering your insurance premiums.

You can see that by making very small changes in co-pays or deductibles, you can generate big savings. The money you save will be more than enough to fund an effective employee wellness program. Tweak the calculator settings as much as you want and when you are done, print your estimates. Ask your broker or consultant to help you find a plan that meets your specifications. Your health care costs will be lower and there will be enough savings to offer a high quality wellness program to your employees.

The second tab will help you identify savings that can be generated by using health insurance premium discounts to encourage employees to participate in wellness programs. Here is how the savings can be generated. Next year, increase the amount your employees pay for their health insurance premium. Allow employees to avoid the increase by participating in a wellness program. Those who do not participate will pay the higher premium. The additional premium amount paid by non-participants is the money you can use to help fund your wellness program.

Click on the “Premium Differential Savings” tab of the Wellness Budget Calculator and enter the number of benefit eligible employees. Then enter the amount of the monthly premium discount you will offer to participating employees. Finally, estimate the percentage of employees you think will qualify for the premium discount. Wellness program participation typically ranges between 30 and 60% initially, but can eventually reach 100%.

The graph shows how much money non-participants will contribute each year. This is an easy way to start a wellness program and have non-participants help fund the program. A word of caution about this approach is warranted. As wellness program improves, there will be fewer non-participants. So eventually, this savings may disappear. Play with the numbers and see how you can create a wellness budget by offering a premium discount to participating employees.