The Case for Worksite Wellness

Worksite Wellness first became popular during the economic boom of the late 1980s and early 90s. Programs featured on-Site gyms and massages, and were used as recruitment tools for young employees searching for nontraditional work environments. However, when the tech bubble burst, so too did the willingness to spend money on perceived perks, and corporations returned to a more old-school benefit structure focused on managed healthcare. In recent years, as Medical Care costs have spiraled out of control, corporations have explored the potential of Worksite Wellness as a cost-saving strategy. Employers 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). Worksite Wellness can help lower the costs associated with: Medical Care premiums – The cost a organization pays for health care 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 corporations absorbing nearly two-thirds of that cost. Pharmaceutical costs – The price of a prescription plan: According to a 2005 study by Mercer, the average annual prescription costs for sizable corporations grew 11.5 percent, making it nearly a decade straight of double-digit growths in cost. Short-term disability (STD) – The cost of offering STD insurance to employees: According to a 2004 study by insurance provider Cigna, the average STD claim results in $13,094 in direct disability payments and medical costs. The report also found that 26 percent of claims related to medical events were a result of chronic conditions that could likely be mediated through Worksite Wellness , and that these cases amount for 56 percent of the STD-related medical costs. Absenteeism — The cost of missed work: Absenteeism cost corporations $660 per employee in 2004, with nearly one-third of corporations characterizing the trend as a genuine concern. Presenteeism — The cost associated with employees who work at decreased work rate levels: Sixty percent of the total cost of employee illnesses 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 Worksite Wellness can lower both direct and indirect Medical Care costs. A 2004 review of Worksite Wellness revealed that, in total, an investment of $1 by a organization in Wellness Programming returned a median cost savings of $2.05 to $4.64.