Wellness Program ROI.

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

Finance and the CEO want hard numbers to show return on investment (ROI). and wellness ROI is tougher to calculate than, say, a 401(k).

18-month guideline

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

It normally takes at least 18 months from the launch of a wellness program to see any causes your healthcare plan bottom line.

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

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

As a rule of thumb, the average cost to the employer is about $3 to $5 per participating staff member per month. Within three years of launch, you ought to be seeing meaningful savings.

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

Consider making wellness programs budget-neutral

For many businesss, the most effective way to manage the cost of a wellness program in the start-up phase is to make it a budget-neutral expense.

In other words, the program neither adds to your healthcare costs at the outset, nor decreases them. Example –  You plan to roll out a wellness program effective Jan. 1. the program will cost the corporation $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 employees are used to seeing small increases in their monthly contributions each plan year.

Just make sure you’re not hitting folks with a large hike on top of that $5. Comparably designed wellness programs pay off about the same – meaning workers buy in and participate at the same rate – whether they’re budget neutral or the company absorbs the cost.

But when employees get clobbered by large-scale contribution hikes at the outset, they often resist the wellness program. the long-term ROI for these programs is often disappointing.

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

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