Workplace Wellness Programs for Self-Funded Employers

Effective program design to maximize  potential cost savings!

As the price of health care increases year after year, we are all looking for creative ways to cut costs.  An increasingly popular means of reducing health care expenses for self-funded employers are workplace wellness programs.  These programs promote preventative health measures and disease management programs for employees in hopes that early intervention will reduce incurred medical costs and absenteeism.  Approximately half of U.S. employers utilize this cost management strategy.[1]  In this article we will explore typical elements, ways to ensure success, and the potential cost savings of effective workplace wellness programs.

At present, there are is no official definition of what constitutes a workplace wellness program.  However the “Workplace Wellness Program Study: Final Report” conducted by the RAND Corporation (2013) describes the following common components:

  • Screening activities to identify health risks: Typically in the form of a health risk assessment (HRA), these questionnaires collect data about the health risks in the population of employees, whether they are behavioral (i.e. smoking, routine physical activity) or physical (i.e. weight, blood pressure).  Other screening activities include clinical screenings which measure employees’ health through physical examinations of height, weight, blood pressure, etc.
  • Lifestyle management interventions: Offered through education campaigns or individual counseling, which promote smoking cessation, healthy eating, regular exercise, stress management, etc.
  • Disease management interventions: Target employees with chronic diseases and provide support or incentives for medication adherence.
  • Health promotion activities to further healthy lifestyles: Such as onsite vaccinations, fitness benefits, healthy food options, and nurse advice lines.

The HRA can be an excellent method of kicking off a workplace wellness program as it allows employers to get a benchmark understanding of the condition of its employees and tailor the subsequent program to those needs.

After selecting which, if not all, components to incorporate into your wellness program design, there are several steps to ensure the success of the program.  RAND identifies five key factors to improve the chances of a wellness programs’ success:

1)  Employ Effective Communication Strategies: Whether it is through face to face interactions companywide email blasts, mailed promotional materials, or a combination of the three (recommended) make sure that every member of the company knows what the program is, how to participate, and any benefits or incentives they may receive through participation.

2)  Ensure Employees Have an Opportunity to Engage: Make elements of the program readily accessible to employees, whether it is through onsite examinations or fitness equipment, allowing more schedule flexibility for fitness classes, or greater availability of healthy food choices onsite.

3)  Engage Leadership to Cultivate a Culture of Wellness:  The greater the investment of mid-level managers, the more likely they are to promote the health program to the employees directly underneath them. Make sure the managers that are in greatest contact with employees understand and buy in to the program.

4)  Make Use of Existing Resources:  Check with your health plan to see what incentives are already built in!

5)  Continuously Evaluate and Improve the Wellness Program:  The best wellness programs are those that continually gather and utilize employee feedback.  Make sure your wellness program addresses the concerns and interests of the population it serves even as those interests change over time!

Certified Health Coach and Corporate Wellness Educator, Diana Pruzinsky has repeatedly seen firsthand that in addition to the stated benefits of a wellness program such as employee weight and symptom reduction; morale, motivation and productivity all increase especially when there is live, ongoing support with participation from management. According to the RAND Employer Survey, 80% of employers reported that their wellness program decreased absenteeism and increased productivity. [2]

When all is said and done, what kind of health care savings are companies seeing as a result of their wellness programs? According to the Wellness Councils of America the return on investment of these programs is 3:1, for every dollar spent on a wellness program, three are saved in eventual care costs in the subsequent two or three years after the program was implemented. The RAND Corporation compared trends in overall health care cost of program participants and nonparticipants over five years and found that the participants annual cost reductions were $157 in comparison to nonparticipants.  It is important to note that while this trend was observed, the cost savings were not found to be statistically significant.  RAND also found that implementation of a wellness program was associated with decreases in hospital and emergency department use, which can considerably reduce costs considering the high expense associated with services at these facilities.

A well tailored workplace wellness program that is implemented correctly could be an effective way to reduce your health care costs as a self-funded employer.  If you are considering constructing your own wellness program, please be sure to consult with your city solicitor or attorney as there are multiple federal and state regulations that pertain to wellness programs and you want to be sure to be in compliance with each.



[1] RAND Corporation, “Workplace Wellness Program Study: Final Report”, 2013, pg. xiv.

[2] RAND Corporation,  “Workplace Wellness Program Study: Final Report”, 2013, pg. 53.