Dive Brief:
- Employee wellness programs are offering everything from free meals and personal trainers to nutritionists, but employers might be spending more on the perks than they're saving on healthcare costs, Bloomberg reports. One company, FS investments, provides all of the above so long as employees consent to a health screening.
- Multiple RAND Corp. studies show that wellness programs with generous perks save employers less money on health insurance expenses than they cost, says Bloomberg. Low cost-savings occur even when participation by employees is high, which is seldom the case, according to the studies. The studies also note that although wellness programs can greatly lower employment costs, such as absenteeism, employers' savings aren't significant enough to be financially beneficial.
- Michael Forman, CEO of FS Investments, claims his company's wellness program has benefits beyond healthcare cost-savings. He told Bloomberg, “If people have the outlet of exercise and people eat healthy, they're going to feel better about themselves. They're going to contribute better at home and at work.” However, Soeren Mattke, a RAND researcher, said FS will never get a return on its investment in the wellness program.
Dive Insight:
Free meals, personal trainers and other perks are hard to turn down, but employee participation remains the thorn in the side of employers even when such perks seem so appealing.
Wellness programs, generally, struggle to prove ROI thanks to their anecdotally documented but hard-to-track boons for employees. Before adding perks to wellness plans, surveying workers on what they might like and whether they would participate in a program could be the best way employers can reduce costs and realize savings on health plan costs.
Not all is well on the compliance front, however. A district judge decided that the Equal Employment Opportunity Commission (EEOC) should re-examine its wellness program rule. Judge John Blake questioned the rule's incentivization and penalization measures and sent the rules back to EEOC for consideration (though they are still in effect). If the rules are rendered null, the change could alter or even end the use of extravagant incentives to boost employee participation.
The AARP sued the EEOC in October for over wellness program incentivization, which it claims gives employers illegal access to workers' personal health data. Like the district judge, the AARP questioned the rule's 30% incentivization measure and seeming disregard for employees' voluntary participation.
