The Case for Corporate Wellness

Corporate Wellness first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site fitness centers and massages, and were used as recruitment tools for young staff members searching for nontraditional work environments. Nevertheless, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and employers returned to a more antiquated benefit structure focused on managed healthcare. In recent years, as Medical Care costs have spiraled out of control, employers have explored the potential of Corporate Wellness as a cost-saving strategy. Organizations such as Johnson and Johnson, General Motors, Motorola and Union Pacifi c Railroad have all seen a signifi cant return on investments in employee health (See Case Studies, p.20). Corporate Wellness can help decrease the costs associated with: Medical Care premiums – The cost a employer pays for healthcare insurance: According to a 2005 study by Hewitt, the Medical Care cost per employee in the United States in 2006 will average $8,046, with employers absorbing nearly two-thirds of that cost. Pharmaceutical costs – The price of a prescription drug plan: According to a 2005 study by Mercer, the average annual prescription drug costs for large employers grew 11.5%, making it nearly a decade straight of double-digit rises in cost. Short-term disability (STD) – The price of offering short-term disability insurance to staff members: According to a 2004 study by insurance provider Cigna, the average short-term disability claim results in $13,094 in direct disability payments and health care costs. The report also found that 26% of claims related to health care events were a result of chronic conditions that could likely be mediated through Corporate Wellness , and that these cases amount for 56% of the STD-related health care costs. Rates of Absenteeism — The price of missed work: Rates of Absenteeism cost employers $660 per employee in 2004, with nearly one-third of employers characterizing the trend as a genuine issue. Presenteeism — The price associated with staff members who work at decreased productiveness levels: Sixty% of the total cost of employee diseases come from presenteeism, according to a 2004 study by the Institute for Health and Productivity Studies at Cornell University. The evidence is clear that strategically designed Corporate Wellness can decrease both direct and indirect Medical Care costs. A 2004 review of Corporate Wellness revealed that, in total, an investment of $1 by a employer in Wellness Programming returned a median cost savings of $2.05 to $4.64.