Wellness Program

What Is a Wellness Program?

The term wellness program refers to an organizational approach to improving individual health. Wellness programs are commonly offered by companies to their employees, providing financial incentives or other resources to stay healthy.

Local and state governments and insurance companies may also offer incentive-based wellness programs aimed at promoting the health of the public, their employees, or insured individuals. Some of the main offerings of wellness programs include company-sponsored exercise and tobacco cessation programs.

Key Takeaways

  • Wellness programs are provided by companies, governments, and insurance companies to encourage individuals to lead healthier lifestyles.
  • These programs improve productivity, decrease sick days, lower insurance expenses, reduce turnover, and lowers workers' compensation claims.
  • Individuals can benefit financially and through an increased sense of wellbeing.
  • Critics argue that these programs only cater to healthy individuals, may lead to discrimination of individuals with below-average health, and are geared to improve corporate bottom lines.
  • Companies may spend anywhere from $150 to $1,200 per employee on wellness programs.

Understanding Wellness Programs

Employers are taking a very serious approach to the health and wellbeing of their employees. As such, wellness programs have become a very important part of the corporate world. These are initiatives that are designed to promote healthy living and work/life balance for employees. Insurance companies and governments may also offer wellness programs for individuals.

When individuals are healthy, it improves productivity, decreases sick days and leaves of absences, lowers an organization's health insurance expenses, reduces turnover, and lowers the chances of workers' compensation claims. Employees can also benefit from wellness programs through lower health insurance premiums, decreased out-of-pocket medical expenditures, and an increased sense of wellbeing.

There are many ways that wellness programs can help individuals make healthy choices to improve their lifestyles. Companies can offer in-house workout spaces or marked walking paths on the corporate campus to encourage physical activity. Some corporations may even offer financial incentives, such as lower health insurance premiums or gift cards for meeting fitness goals. Offerings may include:

  • Company-sponsored exercise
  • Discounted or fully-paid gym memberships
  • Weight-loss competitions
  • Educational seminars
  • Tobacco cessation programs
  • Health screenings that are designed to improve food choices, weight loss, and overall physical wellbeing.

Regardless of how they may be advertised by those who offer them, many people choose not to participate in wellness programs. Some of the main reasons may include a lack of time and commitment and a general lack of knowledge on how to claim wellness-related benefits. Some people may feel uncomfortable about how health screenings and personal information will be used.

Corporate wellness programs should aim to promote the mindfulness of workplace noise and allow individuals to take regular breaks.

Special Considerations

Organizations may create wellness-related linkages between their programs and other company benefits such as employee assistance programs (EAPs). These programs provide support for employees when they find themselves in difficult emotional or physical situations that affect both their health and 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.

Criticism of Wellness Programs

Although they are designed to give individuals a leg up on their health by improving wellbeing and reducing operating costs, there is some criticism of wellness programs. One common criticism of these programs is that they only cater to individuals who are already healthy and that they don't necessarily appeal to those who may have emotional and/or physical issues.

Some critics argue that health screenings are controversial components of many company wellness programs. Corporate wellness programs can lead to unnecessary over-testing That's because 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.

The motivations for employer- and insurance company-sponsored wellness programs are heavily debated. Although these programs may be designed to improve individual health, corporations may adopt certain initiatives that may not actually contribute to people's wellbeing. Instead, they may be developed to simply boost a company's bottom line.

How Much Corporate Wellness Programs Cost

Companies spend anywhere from $150 to $1,200 per employee on wellness programs, depending on the size of the company and the number of individuals employed. According to the Internal Revenue Service (IRS), any "employer-provided cash rewards," such as subsidies for gym memberships count as taxable income since they are not considered medical care.

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

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 may include healthy options at vending machines and cafeterias. Healthy food may also be served at meetings and included in company-provided overtime meals.

  • Google provides employees at-home fitness, a massage program, and other wellness extras. This is, of course, in addition to on-site gyms and free workout classes.
  • Draper, an Indiana-based manufacturer of gym equipment, window shades, and projection screens, 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.
  • 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, the UW Healthcare, and their families (who are also enrolled in the State Group Health Insurance Program), 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 Effective Are Workplace Wellness Programs?

Research published in the Harvard Business Review shows that the return on investment for 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 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 Companies Take to Start a Wellness Program?

Companies looking to start a wellness program should poll their employees on the perks they find most beneficial. While a younger company base may prefer wellness programs such as subsidized gym memberships, more established corporations 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 health care savings and lowering attrition can be significant.

Article Sources
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  1. U.S. Office of Personnel Management (OPM). "Employee Assistance Program (EAP)."

  2. NPR "Overtesting Of Employees Can Be A Side Effect Of Workplace Wellness."

  3. Internal Revenue Service. "Tax Treatment of Wellness Program Benefits and Employer Reimbursement of Premiums Provided Pre-tax Under a Section 125 Cafeteria Plan," Page 2.

  4. Harvard Business Review. "What’s the Hard Return on Employee Wellness Programs?"

  5. Google. "Benefits at Google."

  6. Draper Blog. "Seven Companies With Amazingly Unique Wellness Programs."

  7. University of Wisconsin System. "Well Wisconsin Program."

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