Why Workplace Wellness Programs Fail—and What to do Instead

When workplace wellness programs work, it’s a true win-win. Employees get access to the resources that help them take care of their physical and mental health, allowing them to do their most productive work and live their best lives. Employers, in turn, benefit from having a healthy workforce—especially self-insured employers, who only pay for their employees’ real medical claims. The healthier its employees are, the less the employer pays in health costs and absenteeism.That’s how workplace wellness programs would work, at least, in an ideal world. In reality, research finds that they often fail to create significant change. 

In one study, researchers from Harvard collected data from thousands of BJ’s Wholesale Club employees. BJ’s offered 4,037 employees at 20 of its sites the chance to participate in a wellness program over an 18-month period in 2015 and 2016. By the end of the study, the researchers found that employees at the sites with the wellness program were 8.3 percent more likely to say they regularly exercised and 13.6 percent more likely to say they were actively managing their weight than employees at sites without the wellness program. But there were no other significant differences: Employees at wellness program sites didn’t have lower medical spending, better job performance or improved clinical outcomes compared to employees at sites without wellness programs.  

In another study done during 2016 and 2017 at the University of Illinois at Urbana-Champaign, 4,834 employees were split into a treatment group and a control group. The employees in the treatment group were offered the choice to enroll in a workplace wellness program and received incentives between $50 and $350 to participate in various elements of the program, including biometric health screening and wellness activities like fitness classes and smoking cessation. After a year of the program, researchers found that members of the treatment group spent $566 per month on health expenditures, compared to $562 per month for members of the control group. In other words, participating in the workplace wellness program didn’t translate to lower medical costs. 

Why Workplace Wellness Programs Fail

Workplace wellness programs are more effective for some employers than others. When these programs fail, it’s often due to a combination of factors. 

  • Making measurable change takes time. Workplace wellness programs are designed to create long-term lifestyle changes, but employers may expect unrealistic short-term results. Nothing an employer offers through its program is going to dramatically lower an employee’s risk of a heart attack or stroke in just a few weeks or months. If a business is looking to cut costs and hasn’t seen its wellness program generate results, however, it’s hard to justify continuing the program. 
  • Self-selection means the least healthy employees may opt out. Workplace wellness programs must be voluntary, per the ADA, and the people who choose to enroll may be the employees who are already actively working toward wellness. In the University of Illinois study, the members of the treatment group who chose to participate in the program already had significantly lower annual medical spending than the people who chose not to participate. The employees who opted into the workplace wellness program were also more likely to already exercise on campus than the employees who didn’t enroll. 
  • Logistical issues create barriers to participation. Employees who are already stretched thin between work and personal responsibilities may not have the time or energy to participate in workplace wellness programs, especially if activities take place outside of work hours. Remote workers also may not be able to meaningfully participate in wellness activities that take place onsite.
  • Employees aren’t adequately incentivized to participate. If someone has struggled for years to stop smoking, lose weight or make some other significant lifestyle change, it’s unlikely that a workplace wellness program is going to be the magic bullet that creates that change. A financial incentive of $50 or $100 is probably not going to be enough to motivate people to break long-established habits. 

Alternatives to Traditional Workplace Wellness Programs

While a traditional workplace wellness program may not create measurable results—at least not right away—self-insured employers can find other ways to support their employees’ health goals and lower their own health care costs. 

Emphasizing its employee assistance program is one way for a self-insured employer to connect all its employees with the physical and mental health resources they may need. EAPs tend to be underutilized, in part because employees often don’t really know how or why to access these resources. 

Some employers are also tackling high-cost claims by adopting disease management programs. Disease management programs target employees with chronic conditions, connecting them with patient education and treatment resources specific to those conditions. 

Managing health care costs is of critical importance to all employers, but especially to self-insured employers. Creating a workplace wellness program is just one of a range of strategies to consider, in addition to using stop-loss coverage to cap your financial risk. Self-insured employers should be looking for creative ways to control spending without sacrificing high-quality benefits. 

Stop Loss Insurance Brokers, Inc. works closely with self-insured employers to manage their health care costs and find the benefits solutions that work best for their specific needs. I’m happy to answer any questions you have about self funding and stop loss. Contact us today!


Denise Doyle  Denise Doyle is the President of Stop Loss Insurance Brokers, Inc. She has over 30 years of experience in the industry and is a member of Self Insurance Institute of America.


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    In 2011, the top 5 most expensive medical conditions treated in US hospitals were: Septicemia, Osteoarthritis, Complication of device, implant or graft, Liveborn, and Acute myocardial infarction

    From 2010 to 2013, the number of claims that were individually $1 million or above rose by 1,000%

    In 2017 approximately 18% of the American public will purchase insurance through exchanges, radically transforming the health insurance landscape.

    In 2014, 98% of large firms (= 200 Workers) offer 1+ wellness programs to their employees.

    The most costly 1% of patients account for 20% of national health expenditures – accruing average annual expenses of nearly $90,000 per person.

    6% of firms offering fully-insured plans report they intend to self-insure because of Obamacare.

    In 2014, PPO plans remained the most common plan type, enrolling 58% of covered workers.

    In 2012, 93% of businesses with 5,000+ employees and 80% of companies with 1,000-4,999 employees were self-funded

    Massachusetts has the third-highest prevalence of self-funded insurance in the small-group market (Fewer than 50 employees).

    In 2013, the average deductible was $2,906 for individuals selecting plans from marketplaces. This compares with average deductibles of $1,135 for an individual with employer coverage.

    In 2013, the average annual premiums for employer-sponsored health insurance are $5,884 for single coverage and $16,351 for family coverage, up 5% and 4% respectively from 2012.

    From 2010 – 2013, cancer followed by chronic/end stage renal disease and leukemia accounted for the top 3 costliest illnesses.