Worksite Wellness ProgramsWorksite Wellness Programs

Worksite Wellness first became popular during the economic boom of the late 1980s and early 90s. Programs featured onsite gyms and massages, and were used as recruitment tools for young workers searching for nontraditional work environments.

Nevertheless, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and businesses returned to a more old-school benefit structure focused on managed healthcare. In recent years, as Medical Care costs have spiraled out of control, businesses have explored the potential of Worksite Wellness as a cost-saving strategy.

Corporations 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). Worksite Wellness can help lower the costs associated with:

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

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

Short-term disability (STD) – The cost of offering short-term disability insurance to workers: 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 , and that these cases amount for 56 percent of the STD-related medical costs.

Absenteeism — The cost of missed work: Absenteeism cost businesses $660 per employee in 2004, with nearly one-third of businesses characterizing the trend as a somber issue.

Presenteeism — The cost associated with workers who work at decreased productivity levels: Sixty percent of the total cost of employee illnesses 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 can lower both direct and indirect Medical Care costs. A 2004 review of Worksite Wellness 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.