Employee Wellness Newsletter : The Case for Worksite Health Promotion Programs

Company Health Promotion Programs first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site fitness centers and massages, and were used as recruitment tools for young staff members searching for nontraditional work environments. Still, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and employers returned to a more traditional benefit structure focused on managed medical care.

In recent years, as Health Care costs have spiraled out of control, businesses have explored the potential of Corporate Wellness Programs as a cost-saving strategy. Companies such as Johnson and Johnson, General Motors, Motorola and Union Pacifi c Railroad have all seen a signifi cant return on investments in employee health (See Case Studies, p.20). Corporate Wellness Programs can help reduce the costs associated with:

Health Care premiums – The expense a business pays for health insurance: According to a 2005 study by Hewitt, the Health Care expense per employee in the United States in 2006 will average $8,046, with organizations absorbing nearly two-thirds of that expense.

Pharmaceutical costs – The price of a prescription drug plan: According to a 2005 study by Mercer, the average annual prescription drug costs for big organizations grew 11.5%, making it nearly a decade straight of double-digit increases in cost.

Short-term disability (STD) – The price of offering short-term disability insurance to employees: According to a 2004 study by insurance provider Cigna, the average short-term disability claim results in $13,094 in direct disability payments and medical costs. The report also found that 26 percent of claims related to medical events were a result of chronic conditions that could likely be mediated through Worksite Wellness Programs, and that these cases amount for 56 percent of the STD-related medical costs.

Absenteeism – The price of missed work: Absenteeism cost corporations $660 per employee in 2004, with nearly one-third of corporations characterizing the trend as a somber problem.

Presenteeism – The price associated with employees who work at decreased productiveness levels: Sixty percent of the total cost of employee diseases come from presenteeism, according to a 2004 study by the Institute for Health and Productivity Studies at Cornell University.

The evidence is clear that strategically designed Worksite Wellness Programs can lower both direct and indirect Health Care costs. A 2004 review of Worksite Wellness Programs revealed that, in total, an investment of $1 by a company in Wellness Programming returned a median cost savings of $2.05 to $4.64.