Wellness: Encouraging Health Can Deliver Premium Savings

By David Bottoms, REBC, RHU, CLU, ChFC


Wellness programs have the potential to enhance company morale, improve employee health, and generate employer savings.  And, an effective wellness program doesn’t have to involve much complexity.  Often, the simpler the better.

That said, in order for organizations to find success in the implementation of their wellness program, it is important that they develop reasonable expectations for results over a suitably long time horizon.  Just as fad diets drive short-term illusory results, wellness plans developed with an expectation of driving quick results without any organizational commitment to the development of a culture of health will often fall short and result in frustrated employees and employers.

Often the first question I get from employers when the topic of wellness arises is whether the development of a wellness plan will immediately save the employer money on their health premiums.  In most cases, the answer is “probably not”, although exceptions do exist.

In general, the more immediate benefits of developing a wellness program involve the development of healthier, more engaged employees who are more in-tune with your company’s culture.  There is no doubt; however, that premium savings are a long-term byproduct for employers who invest time in wellness activities and are successful at encouraging employees to engage in healthy lifestyles.

Once an employer determines that a wellness plan is a wise thing to develop, their next question often is: “How do I get started?”  As mentioned above, at least at the outset, it is a good idea to keep it simple.  Not only does keeping it simple make the plan easier to manage, it also increases the likelihood of employee engagement which will, more than any other factor, lead to the success or failure of the effort.

For starters, a wellness plan could be as basic as adding a tobacco surcharge to your health plan premiums and pairing that with an offer of tobacco cessation resources (often available through your health plan administrator) for those employees who indicate a willingness to try to kick the habit.

Another approach is to form a wellness committee of employees to develop wellness-focused team building activities.  By doing something as simple as encouraging employees to take walks together at lunch, hosting healthy eating demonstrations, and developing health-related competitions, employees enhance their sense of camaraderie with co-workers and more deeply engage in your company’s culture.  And, in the wake of the COVID-19 pandemic, it will not be lost on employers how encouraging healthy engagement among and between employees has the potential boost culture while, at the same time, improving physical health.

Although some employers like the idea of developing their own wellness plan, many others prefer to leverage pre-packaged solutions available from the employer’s medical plan provider.  In recent years, insurance carrier support of wellness activity has expanded dramatically with many carriers providing a suite of embedded wellness resources such as FitBits, Apple Watch discounts, online reward platforms, fitness club discounts, etc.  Plus, some insurance carriers, such as Humana, are “putting their money where their mouth is” by guaranteeing premium savings for employers to demonstrate broadscale engagement with wellness activities.

Given the transition in the employer health insurance markets towards plans that are self-funded and or level-funded, pairing the technology, tracking and infrastructure available from your insurance carrier with the energy, enthusiasm and leadership of an engaged wellness committee can, over the course of time, provide meaningful financial results.

Nonetheless, regardless of the path to wellness chosen by an employer or whether financial savings are realized as a result, employee health undoubtedly correlates positively with employee productivity.  In a tight labor market, anything that encourages health, improves company culture and drives productivity is good for business.

David is a monthly columnist in the Cobb Business Journal. To read other articles like this by David Bottoms, you can subscribe to the online edition of the Cobb Business Journal.

Our corporate calling of helping others, along with our embedded employee benefit and life insurance specialties, intersects with our client’s desire for ongoing financial security and protection.

David Bottoms, REBC, RHU, CLU, ChFC



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