While the economy continues to improve, many businesses aren’t feeling its effects as they watch profits get eaten away by rising healthcare costs. According to the Kaiser Family Foundation, the average health insurance premium has risen 19% over the past five years, and those costs are expected to continue growing faster than the economy in years ahead.
Employers are shelling out more to provide quality coverage for their workers and improve retention rates in a tight labor market. But that doesn’t mean employees aren’t feeling the pinch, too. Their out-of-pocket costs, including deductibles, copays and coinsurance grew 66% in the 10 years spanning 2005 – 2015, more than twice the rate of wage growth during that same period, according to Kaiser. And, despite its original intent, the ever-evolving Affordable Care Act (ACA) isn’t easing the burden either.
Proactive employers are making efforts to mitigate the risks of rising healthcare costs on their own by implementing employee wellness programs. Read on to learn more about wellness programs and how they can help reduce escalating rates and improve employee health and morale.
What Might an Employee Wellness Program Look Like?
Healthier employees lead to lower healthcare costs, which inevitably results in lower insurance premiums over time. A wellness program can complement an established health benefits plan by incentivizing individuals to focus on changing behaviors that reduce the likelihood of health issues and expensive claims — especially those associated with chronic illnesses such as Type 2 diabetes, heart disease and others.
There are various forms of wellness programs that a company can adopt. Some insurance carriers offer highly structured plans through an online portal with educational materials and quizzes, and work with wearable fitness trackers to measure activity each month. Participants can earn points for reaching certain milestones and getting preventative screenings, and they can also earn gift cards respective to their achievements.
Many employers take their wellness programs further by working with a consultant to develop a homegrown approach. This may include offering walking trails, fitness classes and standing desks, or replacing sugary snacks and beverages in vending machines with healthier options. Others provide educational “lunch & learns” on effective methods for weight loss, eliminating tobacco use, nutrition, emotional health and more.
A good wellness program can actually improve worker morale and provide team bonding opportunities with a little friendly competition thrown in to make it fun. Consider a weight loss challenge, yoga classes over the lunch hour, healthy snack options in the breakroom or paying employee entry fees for a local 5K.
The possibilities are endless. The most effective programs, however, start with an assessment of a company’s employee population to examine the greatest potential health risks; then, customize a plan to help those who need it the most.
How a Wellness Program Can Reduce Overall Healthcare Costs
The reality is that health insurance premiums aren’t going down, and a wellness program is one of the best ways to keep costs from escalating out of control. A wellness program is meant to serve as a part of your strategic long-range forecast. Your return on investment may not happen overnight, but several studies have shown that for every dollar spent on a wellness program, a company saves an average of $3.27 because of reduced healthcare costs. Those savings are significant!
Consider the impact that eliminating even a single claim could have. For example, what if you have an employee who hasn’t had a health screening in several years and, as a result of a wellness program incentive, schedules an appointment where it’s discovered that he has high cholesterol and is at a major risk of a heart attack? Preventing a potential heart attack will not only save thousands of dollars in claims; it could reduce time away from work, minimize the employee’s out-of-pocket expenses and, most importantly, potentially save his life.
Potential Challenges of Implementing a Wellness Program
Developing an effective wellness program takes time and commitment to create lasting change. If a company chooses to develop its own in-house program, it will need to have a dedicated staff member who takes responsibility for getting it up and running and then keeping it going — to serve as a champion. That person will need to also oversee any associated administrative tasks, work with outside parties to set up biometric health screenings and coordinate any additional activities associated with the program. Because of the time commitment necessary to do it right, many organizations choose to work with an HR services provider that can make recommendations, help establish a robust program and handle most of the leg work.
The benefits of establishing a wellness program are clear, but setting one up for your company doesn’t need to be overwhelming. Reach out to the experts at McClone for a complimentary assessment where we’ll talk through your specific HR needs. Even small steps toward building a healthier employee population can reap big rewards down the road.
Your comprehensive risk management partner delivering business insurance, employee benefits, HR solutions, 401K services and personal insurance to protect and boost your bottom line while growing the communities we serve.