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 ROI. And wellness 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 you can use as a guideline. It’s useful whether you already have a health promotion program or are thinking about beginning one.
It generally takes at least 18 months from the launch of a health promotion program to see any causes your health care plan bottom line.
For a lot of firms, 18 months is the point at which workers’ improving health starts to cancel out the cost of sponsoring and administering the wellness program.
By and large, the long-term cost savings from a health promotion program are going to be driven by how much you’re willing to spend. Normally, corporations get what they pay for – both in time and money invested.
As a rule of thumb, the typical cost to the business is about $3 to $5 per participating worker per month. Within three years of launch, you should be seeing meaningful savings.
The typical Return On Investment tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term for achieve the long-term savings? and how can you maximize the long-term payoff?
Consider making wellness programs budget-neutral
For many companys, the most effective way to manage the cost of a health promotion program in the start-up phase is to make it a budget-neutral expense.
In other words, the health promotion program neither adds to your medical costs at the outset, nor decreases them. Example – You plan to roll out a health promotion program effective Jan. 1. The health promotion program will cost the corporation $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 members 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 wellness programs pay off about the same – meaning workforce purchase in and participate at the same rate – whether they’re budget neutral or the company absorbs the cost.
But when staff members 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 often disappointing.
If you’re faced with a situation where achieving a budget-neutral wellness program would cause 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.
