Full-time employees in the U.S. work approximately 1,700 hours per year. With so much time spent at the daily grind, healthy habits can often fall by the wayside. To combat this, more than 90% of large employers and 73% of small employers sponsor wellness initiatives in the workplace.
For many employers, these programs promise savings in the face of rising heath care costs, and for their employees, the opportunity to start or maintain healthy behaviors such as working out, getting flu shots and screening for high blood pressure.
Encouraging healthy behaviors while also driving down costs sounds like an easy win for all involved, but not everyone is on board with the idea. Critics believe these programs are costly, put employee privacy at risk and discriminate against employees if they cannot — or do not — participate.
In fact, there have been several high-profile lawsuits charging that wellness programs are not, in practice, voluntary and that the protections outlined in the Affordable Care Act (ACA) are neither clear nor sufficient to ensure that employers comply with the Americans with Disabilities Act.
Are Workplace Wellness Programs Worth it?
Pros of Workplace Wellness Programs
A well-received, peer-reviewed meta analysis (Baicker et al., 2010) of literature showed an average reduction of health care costs of $3.27 per $1 spent and a reduction of costs due to absenteeism of $2.73 for every $1 spent. Studies also show disability, worker compensation and recruiting and training costs are decreased by workplace wellness programs.
Wellness programs benefit company culture and attract talent. A Virgin Pulse 2014 Survey of Workplace Health Priorities found 87% of respondents agree that wellness programs positively impact company culture. It is thought that morale is enhanced as well as inter-employee relationships — leading to an overall improvement in working conditions. Furthermore, 88% of respondents cited workplace wellness programs as important when deciding on an employer.
Wellness programs improve health behaviors and outcomes. Many companies and individual employees report improvements in healthy behaviors after participation in workplace wellness programs. For example, Johnson & Johnson followed employees for 15 years after starting its wellness programs. They found their initiatives contributed to a 75% reduction in the number of employees who smoke and a 50% reduction in the number of employees with high blood pressure and sedentary lifestyles.
Wellness programs boost productivity and reduce absenteeism and disability claims. A fitness program by telecommunications giant decreased employee absences by .8% — saving the company $2 million annually.
A rigorous study of blue-collar workers found that comprehensive workplace wellness programs reduced disability by 14% over two years. The savings from disability payments alone was enough to cover the cost of the program.
Cons of Workplace Wellness Programs
Wellness programs cost a lot of money to run and do not have sufficient return on investment. Recent studies have found that the return on investment in wellness programs to be a ratio of 1-to-1 or less.
Wellness programs are not, in practice, voluntary. The ACA stipulates that participation in workplace wellness initiatives must be voluntary but does not describe a clear framework as to how that should be accomplished. In practice, employees may feel that wellness programs are mandatory because of the financial incentives and disincentives tied to participation.
Wellness programs are discriminatory and can deter people from seeking health care. A study by Horwitzet al. (2013) showed that it is very difficult for workplace wellness programs to have significant returns without being discriminatory toward people with disabilities, chronic conditions or low socioeconomic status. This could mean those who would benefit most from wellness programs are discouraged from participating.
Wellness programs are a violation of privacy. Many employers collect biometric data through blood tests to collect aggregate information regarding their employees’ health in terms of preventable chronic conditions, such as diabetes, heart disease and high blood pressure. Many employees believe the collection of biometric data to be an infringement on their privacy and reject being “strong armed” into health behaviors by their employer.
Make a Choice
There are compelling arguments on both sides of the workplace wellness debate. Companies will have to take a careful look at the pros and cons of workplace wellness programs and consult with health administrators to design workplace wellness programs or alternative strategies to control health care costs. Companies that decide to implement such programs must address the challenges of creating an effective program while preventing discrimination, ensuring privacy and keeping costs in line.
Adam Levenson is the community manager for the online master of health administration (MHA@GW) program at the Milken Institute School of Public Health at the George Washington University