Health Fairs

Wellness programs are a long-term investment. But how long should you wait for results?

Finance and the Chief Executive Officer (CEO) want hard numbers to show Return On Investment (ROI).  And wellness Return On Investment (ROI) is tougher to calculate than, say, a 401(k).

18-month guideline

Current studies have established some benchmark data on wellness Return On Investment (ROI) you are able to use as a guideline. It’s useful whether you already have a wellness program or are thinking about beginning one.

It usually takes at least 18 months from the launch of a health promotion program to see any leads to your healthcare plan bottom line.

For a lot of firms, 18 months is the point at which workers’ bettering health starts to cancel the cost of sponsoring and administering the wellness program.

By and large, the long-term cost savings from a wellness program are going to be driven by how much you’re willing to spend. Usually, companies get what they pay for â.” both in time and money invested.

As a rule of thumb, the typical cost to the employer is about $3 to $5 per participating worker per month. Within three years of launch, you ought to be seeing meaningful savings.

The average Return On Investment (ROI) tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term in order to achieve the long-term savings?  and how can you maximize the long-term payoff?

Consider making health promotion programs budget-neutral

For a lot of employers, the most effective way to manage the cost of a wellness program in the start-up phase is to make it a budget-neutral expense.

In other words, the wellness program neither adds to your healthcare costs at the outset, nor reduces them. Example –  You plan to roll out a wellness program effective Jan. 1.  The wellness program will cost the organization $5 per worker.

You can roll the $5 per month cost directly into the employee’s monthly share of their health care premium. In this age of continuous cost-shifting, most staff are used to seeing small increases in their monthly contributions each plan year.

Just make sure you’re not hitting folks with a large hike on top of that $5. Comparably designed health promotion programs pay off about the same â.” meaning staff members purchase in and participate at the same rate â.” whether they’re budget neutral or the business absorbs the cost.

But when workers get clobbered by large-scale contribution hikes at the outset, they often resist the wellness program.  The long-term ROI for these wellness programs is usually disappointing.

When you’re faced with a situation where achieving a budget-neutral health promotion program would trigger push-back, your firm is better off absorbing most or all the wellness costs.

The biggest hurdle is to get over the hump for those first 18 months or so.