Overlooking the high costs of employee health and wellness programs

The primary attraction of corporate health and wellness programs is avoiding rising healthcare-related costs, as well as serious health problems for employees, through prevention. However, the fact that the crux of such programs is based on averting something that hasn't happened yet makes it difficult to market them to employers.

"Trying to measure cost avoidance is hard (because) it's not what we saved, it's what costs we didn't incur," Melissa Campbell, benefits and human resource operations manager of Kansas City-based American Century Investments, told the Kansas City Star. The company has advocated employee wellness for nearly two decades.

High start-up costs can be off-putting for companies looking to set up employee wellness programs, but looking at initiatives from a common sense perspective can help to encourage program adoption.

"We know if we can move people to a lower health risk category, we're going to save money," Jim Clay, chief executive of brokerage consultancy firm SRA Benefits, told the newspaper.

In an attempt to quantify the benefits of preventive efforts, 17 of the largest employers in the Kansas City area have formed the Kansas City Collaborative. There are no results yet, but the companies are closely tracking their health insurance costs and employee incentives in hopes of identifying the most successful corporate wellness strategies.

A popular tactic is to reduce premium costs for employees who make health-conscious decisions with regard to company offerings. For example, the newspaper reports that American Century workers can reduce their single-coverage premium costs by $120 simply by taking health risk assessments, and non-smoking employees at Sprint receive insurance premium reductions of approximately $20 per pay period. Cerner's offerings are more expansive, with workers earning up to $700 worth of reductions through a points-based incentive program that covers flu shots, exercise, weight loss and health risk assessments based on measuring their body mass index along with other factors such as cholesterol.

However, for companies looking to save money, financial incentives may not be the way to go. A recent study by the Harvard School of Public Health found that gift cards and paid time off were popular incentives being used by employers.