What Is a Wellness Program?

An organizational approach to improving individual health, wellness programs include activities such as company-sponsored exercise, weight-loss competitions, educational seminars, tobacco-cessation programs, and health screenings that are designed to help employees eat better, lose weight, and improve overall physical health.

Wellness programs often involve financial incentives for employees, such as lower health insurance premiums or gift cards. Local and state governments may also offer incentive-based wellness programs aimed at promoting the health of their citizens or public employees.

Key Takeaways

  • Wellness programs are provided by organizations such as firms or state governments to encourage employees to lead healthier lifestyles.
  • Weight-loss competitions, educational seminars, and exercise programs are examples of wellness programs.
  • Wellness programs can pay dividends for employees and employers when it reduces expenses for health insurance or health care.
  • Wellness programs can be controversial when data collected on weight, cholesterol, or other variables result in de facto discrimination.
  • Companies will spend anywhere from $150 to $1,200 per employee on wellness programs, and research suggests that highly effective wellness programs can net about $6 in return on every $1 invested.

Understanding Wellness Programs

Besides improving employee productivity and decreasing sick days and leaves of absence—all of which reduce operating costs—wellness programs may be able to lower an organization's health insurance expenses. Employees can also benefit from wellness programs through lower health insurance premiums, decreased out-of-pocket medical expenditures, and an increased sense of well-being.

Many companies offer in-house workout spaces or marked walking paths on the corporate campus to encourage physical activity. Others institute no-smoking policies, stipends to offset wellness costs such as a gym membership, or policies requiring seat belt use in company vehicles.

It's important for corporate wellness programs to promote mindfulness of workplace noise and regular, appropriate breaks.

Special Considerations

In addition, organizations might create wellness-related linkages between their wellness program and other company benefits such as employee assistance programs (EAPs), which help employees get support when they are in a difficult emotional or physical situation that affects both their health and their work. EAPs connect employees to counselors, who can advise them confidentially on issues ranging from emotional distress, a difficult medical diagnosis, and personal or work-related issues to life events such as marriage or parenting.

Health screenings can be a controversial component of many company wellness programs. Some people contend that tracking cholesterol, body mass index, and other figures leads to de facto discrimination and heavier financial burdens placed on workers with below-average health.

Examples of Wellness Programs

Corporate wellness programs offer a variety of scheduled programs, including stress management seminars that cover topics such as sleep to work-life balance, cooking classes, healthy recipe exchanges, financial well-being, and fitness challenges. Other components of an effective corporate wellness program might include healthy vending machines and cafeteria offerings. Healthy and appealing food might also be served at meetings and included in company-provided overtime meals.

Google provides an example of a unique wellness program. The company offers employees massage therapy and has a massage program with more than 30 therapists throughout the United States.

Another corporate wellness program was created by Draper, Inc., an Indiana-based manufacturer of gym equipment, window shades, and projection screens. The company instituted a 10-week weight-loss challenge called “Dump Your Plump,” which consists of 12 teams of six employees each competing to win weekly grocery gift cards. A cash prize is awarded to the overall winner.

As an example of a government wellness program, the state of Wisconsin started its Well Wisconsin initiative in 2018 to fill the gap in wellness programs offered by more than 70% of the state's private employers at the time. State employees, including employees of the University of Wisconsin System and UW Healthcare, among other divisions, and their families could earn $150 per adult for fulfilling three wellness activities: a health assessment survey; a physical check-up or health screening; and participation in one or more wellness activities.

How Much Corporate Wellness Programs Cost

Companies will spend anywhere from $150 to $1,200 per employee on wellness programs, depending on the size of the company and the number of employees it has. However, this sometimes comes with a catch: the Internal Revenue Service clearly states that any "employer-provided cash rewards," such as subsidizing a gym membership, still count as taxable income since they do not qualify as medical care.

That being said, many studies have been done on the return on investment (ROI) of wellness programs. For example, one study by Towers Watson and the National Business Group on Health found that companies with highly effective wellness programs had a significantly lower turnover rate than companies with ineffective wellness programs, with 9% voluntary attrition compared to 15% without. In addition, research published in the Harvard Business Review shows that ROI on effective employee wellness programs can be as high as six to one.

$150 to $1,200 per employee

Companies will spend anywhere from $150 to $1,200 per employee on wellness programs.

Wellness Program FAQs

How Effective Are Workplace Wellness Programs?

Research published in the Harvard Business Review shows that ROI on effective employee wellness programs can be as high as six to one.

What Are Reasons Why Employees Don’t Participate in Wellness Programs?

Many employees don't participate in wellness programs simply due to lack of time, lack of knowledge on how to claim these benefits, or sensitivities around certain types of wellness programs, such as health screenings that may compromise their personal information.

What Steps Should a Company Take to Start a Wellness Program?

Companies looking to start a wellness program should poll their employees on the kinds of perks that would be most beneficial for employees. While a younger company base may prefer wellness programs such as subsidized gym memberships, others may prefer health screenings or mental health benefits such as access to free therapy, counseling sessions, or otherwise.

The Bottom Line

Corporate wellness programs can offer their employees a huge benefit in managing their work and personal life balance. From cooking classes to gym memberships, health screenings, massage therapists on-campus, and subsidized counseling sessions, wellness programs come in all shapes and sizes. Ultimately, serious investment in these benefits is ultimately about understanding the employees' expectations. If done well, the return on investment in healthcare savings and lowering attrition can be significant.