When it comes to wellness programs, it may be tough to get past all the hype. Here’s how to avoid the three most common traps corporations fall into.
Trap #1. the “one-size-fits-all” approach
For good reason, your organization doesn’t simply copy other firms’ 401(k) plans or compensation designs. Yet, all too often, firms adopt ill-fitting wellness programs based on things that have worked elsewhere.
Your CFO might have seen data on the cost savings other corporations have achieved via certain wellness incentives. Or an old colleague of your CEO swears by the program at his or her own firm.
In response, the top brass pushes for a copycat program – for instance, offering smoking cessation incentives.
That might be a good idea, if use of tobacco-related diseases are a key driver of your company’s health care costs. But how can you be sure? is it good enough to have your workers undergo a health risk (assessment|appraisal}?
Typically, the answer is no.
Health risk (assessment|appraisal}s are a great beginning place, but it’s often a mistake to stop there. the assessments help you get a feel for what your employees’ baseline physical problems are before you attempt to design a program around them.
This creates rough outlines of what your program goals must be and where to target employee initiatives. When you want the maximum bang for your wellness buck, you’ll have to dig a little deeper for information. Key places to look –
• your organization’s medical-claims breakdown for the last three years
• prescription-drug claims
• worker absence information
• employee assistance program (EAP) use
• disability claims, and
• employee demographics (workers’ ethnic, gender, age and dependent coverage status points to greater – and lesser – health risks associated with each category).
Trap #2. Leaving the program on autopilot
Many wellness programs often get off to a good begin and then fizzle out. Businesss are left wondering what went wrong. Their mistake – They failed to revisit the program on an ongoing basis – at least every other year.
Why it’s critical – Your cost-drivers can easily shift as employees come and go from the corporation.
Example – This year, emphysema and other use of tobacco diseases may be your biggest cost driver. But two years from now, it may be obesity and diabetes.
Unless you continuously track the program and adjust your goals as necessary, you may not be prepared to meet those new challenges.
Trap #3. Unrealistic expectations
Usually, it takes at least a year and a half for companys to break even on the cost of a wellness program. as a rule of thumb, the typical program cost per staff member per month to the company is about $3 to $5.
If, after three years, you still aren’t seeing results, something went wrong. Currently, the benchmark ROI after the third year of a wellness program is $4 to $5 saved for every dollar spent.
How can you manage the cost in the short-term? In many cases, corporations pass the cost of the wellness program on to the staff members. for example, let’s say you want to roll out a wellness program effective January 1 (or no matter what your first day is of the new plan year).
You can roll that $3 to $5 per staff member per month cost directly into the employee’s monthly share of their healthcare premium. That makes the wellness program a budget-neutral expense for your organization.
But remember – You get what you pay for – both in time and money invested. the less guesswork that’s involved in the planning and execution, the better the chance for success.
