Wellness Programs : Health Promotion Program ROI.

Wellness programs are a long-term investment. But how long should you wait for results?

Finance and the Chief Executive Officer (CEO) want hard numbers to show Return On Investment.  And wellness Return On Investment is tougher to calculate than, say, a 401(k).

18-month guideline

Recent studies have established some benchmark data on wellness Return On Investment you are able to use as a guideline. It’s useful whether you already have a wellness program or are thinking about starting one.

It typically takes at least 18 months from the launch of a health promotion program to see any results in your healthcare plan bottom line.

For a lot of firms, 18 months is the point at which workers’ bettering health starts to cancel out the cost of sponsoring and administering the health promotion program.

By and large, the long-term cost savings from a wellness program are going to be driven by how much you’re willing to spend. Ordinarily, businesses get what they pay for - both in time and money invested.

As a rule of thumb, the average cost to the company is about $3 to $5 per participating worker per month. Within three years of launch, you should be seeing significant savings.

The average Return On Investment (ROI) tends to be about $4 to $5 saved for every dollar spent. So how can you manage the costs in the short-term in order to achieve the long-term savings?  and how can you maximize the long-term payoff?

Consider making wellness programs budget-neutral

For a lot of corporations, the most effective way to manage the cost of a health promotion program in the start-up phase is to make it a budget-neutral expense.

In other words, the wellness program neither adds to your medical costs at the outset, nor lowers them. Example -  You plan to roll out a wellness program effective Jan. 1.  The wellness program will cost the business $5 per staff member.

You can roll the $5 per month cost directly into the employee’s monthly share of their health care premium. In this age of continuous cost-shifting, most workers are used to seeing small increases in their monthly contributions each plan year.

Just make certain you’re not hitting folks with a big hike on top of that $5. Comparably designed wellness programs pay off about the same - meaning staff members purchase in and participate at the same rate - whether they’re budget neutral or the business absorbs the cost.

But when personnel get clobbered by large-scale contribution hikes at the outset, they often resist the health promotion program.  The long-term Return On Investment for these health promotion programs is often disappointing.

When you’re faced with a situation where achieving a budget-neutral wellness program would trigger push-back, your firm is better off absorbing most or all the wellness costs.

The largest hurdle is to get over the hump for those first 18 months or so.