Are Employee Wellness Programs Really Worth the Investment?

04/28/2015 by

Weight loss programs. Gym membership discounts. Smoking cessation incentives. Flu vaccinations.

Employee wellness programs are hot.  And what’s not to like? Who wouldn’t want their company to foot a portion of their gym membership, pay for their midday smoothie, and make it easier to monitor their health?

While programs that encourage healthy behaviors may be a popular and prevalent trend, not everyone is a fan. Critics claim these programs are costly, discriminatory, and jeopardize employee privacy.

So what are workplace wellness programs exactly? What’s wrong with rewarding employees who eat their vegetables, don’t smoke, and ride their bikes to work? Let’s take a closer look at what workplace wellness programs are, as well as the pros and cons of implementing them.

What’s a workplace wellness program?

Workplace wellness programs focus on healthy lifestyle choices and the prevention of disease and injury. Many feature financial incentives aimed at motivating employees to take proactive steps to monitor and/or improve their health. For example:

  • Free lifestyle-modification programs that support employees in their efforts to manage a chronic disease, eat healthy, and/or quit smoking
  • Reduced health insurance premiums for employees who complete health-risk assessments
  • Discounted gym memberships or cash incentives for employees who ride their bike to work

Workplace wellness programs have quickly become a staple in many organizations. More than 90 percent of large employers and 73 percent of small employers sponsor wellness initiatives in the workplace. In 2013, medium-to-large employers spent an average of $521 per employee on wellness programs, and workplace wellness programs are expected to double in 2015 among the nation’s largest employers.

The pros of offering a wellness program

We know wellness programs are popular… but are they truly worth it? Here are some of the pros of offering such a program in your workplace. (Click here to tweet these pros.)

Wellness programs pay off in the long run   

U.S. employers spend approximately $2 billion annually on wellness programs, with the hope that these programs will result in healthier employees who are more productive, take fewer sick days, and are more engaged at work.

One report cites that for every dollar spent on wellness programs, medical costs fall by about $3.27 and absenteeism costs drop by about $2.73. According to the Center for Disease Control and Prevention (CDC), workplace wellness programs can also reduce “presenteeism” — the measurable extent to which health symptoms, conditions, and diseases adversely affect the productivity of employees who choose to remain at work.

Wellness programs have a positive impact on company culture

Employees want to be healthy. According to a 2014 Virgin Pulse Survey, employee wellness programs have a positive impact on company culture and give employers an advantage when it comes to recruiting. Eighty-eight percent of employees surveyed noted workplace wellness programs as a factor in selecting their place of employment.

Wellness programs contribute to healthy behaviors and outcomes

When comparing wellness program participants to similarly matched non-participants, a recent RAND study reported meaningful improvements in areas that include exercise frequency, smoking behavior, and weight control. These improvements were observed in those who participated regularly over a four-year period.

The cons of investing in wellness programs

Wellness programs aim to encourage workers to be more healthy. But do they really work? Critics claim these programs are costly, discriminatory, and jeopardize employee privacy.

Wellness programs are expensive and have a low return on investment

According to one study published in The American Journal of Health Promotion, the return on investment of workplace wellness programs had an overall mean value of -.22. This means that for every dollar invested, only 78 cents were returned.

Wellness program practices are not clear

The Affordable Care Act requires that participation in workplace wellness initiatives be voluntary, but it it doesn’t describe a clear framework for how to achieve it. Some employees may feel that wellness programs are mandatory or required because of the financial incentives and/or the penalties that are linked with participation.

Wellness programs are discriminatory

Some critics argue that wellness programs only benefit those who are already live healthy, active lifestyles, arguing that financial incentives to get healthier are financial penalties for workers who resist participation or who aren’t as fit. One study showed that it is very difficult for workplace wellness programs to have significant returns without being discriminatory toward people with disabilities, chronic conditions, and/or low socioeconomic status.

Wellness programs are a violation of privacy

Since many workplace wellness programs involve health screenings and the disclosure of potentially sensitive employee information, some employees have concerns that collection of this information violates their privacy and could be used to reduce benefits or coerce them to adopt healthier behaviors by their employers.

What do you think?

Are workplace wellness programs worth it? You decide! Do you value a company that promotes fit, healthy lifestyles? Let us know by providing your comments below.

Adam Levenson is the community manager for MHA@GW, the online master of health administrationprogram at the Milken Institute School of Public Health at the George Washington University. Adam is passionate about higher education, health care policy, and the New England Patriots.