Over the past several decades, many companies have created wellness programs that aim to improve the lives of employees outside of the workplace, improve performance at work and lower health care costs. Wellness has also expanded to include financial wellness, psychological wellness and all other kinds of wellness. Creating incentive programs to get employees to eat healthier foods, exercise and schedule medical screenings has become quite an industry. On average, companies spend more than $500 per employee per year to achieve these goals. It sounds fine except for one caveat: wellness programs don’t appear to work.
Al Lewis and Vik Khanna, well-regarded experts in disease management and health care, have analyzed a number of academic studies on employee wellness programs. They have arrived at the conclusion that they don’t lead to sustained improvements in employee health and they don't lower employer health care costs.
Small-business owners should take note. An important component of Obamacare legislation centers on employee wellness programs, offering incentives for small businesses to offer them. These incentives take the form of reduced tax liabilites. If your company spends $521 per employee on wellness programs, then assuming you are at the 35 percent tax bracket and profitable then your actual cash cost, after tax incentives, would be $339. It could be even less if you are in a state that offers additional tax incentives. Unless your health insurance provider is reducing your premiums by at least this amount per employee, the program is not a financial winner.
Yet if they don't work, is it a good idea to implement one—even with a subsidy? Do you have a workplace wellness program? What has been your experience?
[Harvard Business Review]
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