Wellness programs are an excellent investment for companies in making their employees healthy and productive. There are significant impacts on companies’ bottom lines and help build an engaged workforce, leading to greater productivity.
So how cost-effective are wellness programs for your business? Here’s what you need to know.
Lower medical costs
Medical costs can decrease thanks to adopting a wellness program for employees. One analysis found that medical costs can fall by $3.27 or every $1 spent by a company on its wellness program. A critical area to focus on is disease management. A Rand Wellness Programs Study found that disease management was responsible for 86 percent of health care savings and a 30 percent decrease in hospital admissions.
The savings can come from all over. The Foundation of Employee Benefit Plans has found that employers save $1 to $3 in their healthcare costs for every dollar they invest in a wellness program. Those savings come from direct and indirect costs, including workers’ compensation claims and increased retention rates.
A Center for Disease Control and Prevention study from 2016 breaks down the healthcare costs even further. A person who did not exercise spent about $5,800 per year on healthcare. Those who exercised up to 150 minutes spent about $5,000, and those who went more than 150 spent $4,500.
All the savings are not just for healthy employees who take advantage of a free gym membership. Harvard Business Review studied employees with higher health risks, including high body fat, blood pressure, anxiety, and more. Many achieved better health thanks to the wellness program. Fifty-seven percent were considered low risk for health problems after six months, which is $6 in healthcare savings for every dollar the employer spent on the wellness program and a $1,421 reduction in medical costs per employee as compared to the year before.
Wellness program benefits
Wellness programs are not only cost-effective because of the healthcare savings. There are many other important benefits. Businesses see less absenteeism, including paying out less sick pay and having employees spend less time away from work. They also see increases in employee engagement, productivity, retention, motivation, and more.
Get the benefits of wellness programs through Edenred’s Lifestyle Spending Accounts. Offering these programs can help employees with their health and wellness, including physical wellness and more.
Would Lifestyle Spending Accounts be a good fit for your company? If so, book a meeting with us so we can customize a program that is right for you.