Company Wellness : Wellness Program Return On Investment.

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

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

18-month guideline

Recent studies have established some benchmark data on wellness Return On Investment you are able to use as a guideline. It’s useful whether you already have a health promotion program or are thinking about starting one.

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

For many firms, 18 months is the point at which workers’ improving health begins to cancel the cost of sponsoring and administering the health promotion program.

By and large, the long-term cost savings from a health promotion program will be driven by how much you’re willing to spend. Generally, organizations get what they pay for – both in time and money invested.

As a rule of thumb, the average cost to the corporation is about $3 to $5 per participating worker per month. Within three years of launch, you must be seeing significant savings.

The typical ROI tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term to 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 wellness program neither adds to your medical costs at the outset, nor lowers them. Example –  You plan to roll out a wellness program effective Jan. 1.  The wellness program will cost the organization $5 per staff member.

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 be 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 workers buy in and participate at the same rate – whether they’re budget neutral or the corporation 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 Return On Investment (ROI) for these wellness programs is usually disappointing.

If you’re faced with a situation where achieving a budget-neutral wellness 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.