Workplace wellness incentive programs have been around for decades, with good reason. 

In fact, according to RAND, as far back as 2012, half of all employers with at least 50 employees offered wellness incentive programs, and nearly half of employers without a wellness incentive program planned to introduce one. 

That same study found that programs that included a lifestyle management program and a disease management program reduced employers’ average health care costs by about $30 per member per month.

Let’s face it: unhealthy or at-risk employees suffer from factors like being overweight, high blood pressure, diabetes, and depression, all of which can lead to costly health claims. 

The reality is that chronically ill employees typically consume around 50% of a company’s claim expense. According to an HBR study, if a program preempts 25 unnecessary emergency visits in a year, it can easily save $50,000 in a year.

On this page, we’ll explore why wellness incentive programs have become a must-have benefit offered by top organizations and desired by top talent.

Benefits of an Employee Wellness Incentive Program

Employee wellness incentive programs are implemented primarily to support the health and wellness of an organization’s workforce. But, as you’ll see, there are a handful of benefits of implementing a wellness program that stretch beyond the health of your employees:

  1. Improved physical health — Wellness incentive programs can help your employees improve their physical health by providing access to fitness facilities, health screenings, and other resources. In fact, early intervention may help reduce the likelihood of conditions like diabetes, cancer, and hypertension.
  2. Improved mental health — Wellness incentive programs can also support employees’ mental health by offering stress management resources and other mental health support services. Programs aimed at supporting and improving employees’ mental well-being are more important than ever, with a recent survey revealing that 31% of employees had increased anxiety, 24% had decreased enthusiasm, and 20% had increased depression.
  3. Increased productivity — Put simply, employees who are healthy and happy are more likely to be productive and engaged in their work. Wellness incentive programs can help employees achieve better work/life balance, which can lead to increased productivity.
  4. Reduced absenteeism — Employees who participate in wellness incentive programs take fewer sick days, saving employers time and money, and keeping the workplace running smoothly. According to ERC’s poll of Ohio employers, 21% of organizations used wellness incentive programs to manage absenteeism in 2021.
  5. Improved morale — Wellness incentive programs contribute to a positive workplace culture, which, in turn, can improve morale and increase job satisfaction among employees. By strengthening employees’ minds, bodies, and spirits, employers can create a healthy and wholesome environment.
  6. Attract and retain talent — Many employees value the opportunity to participate in wellness incentive programs, and offering these programs can help an employer attract and retain top talent. In 2021, 65% of Ohio employers that we surveyed reported communicating with employees about wellness-related information to strengthen employee engagement and improve retention rates.

Components of an Employee Wellness Incentive Program

Each organization’s wellness incentive program will depend on its organizational goals, employee goals, company size, and available resources. 

One benefit of wellness incentive programs is their flexibility — if organizations are finding that one program has little participation or isn’t yielding the results they’re looking for, other programming can be added. Here are some common components of an employee wellness incentive program:

  1. Health education — This can include workshops and other educational resources that provide employees with information about healthy lifestyle choices. This education is intended to quell poor eating habits, smoking, and a general lack of exercise.
  2. Disease management — Programs designed to help employees who already have a chronic disease, helping employees take better care of themselves through activities like reminders for medications and communication between the patient and their physician. This is particularly applicable to participants with heart disease, diabetes, and emphysema.
  3. Health screenings — Wellness incentive programs may offer employees access to health screenings, such as blood pressure checks, cholesterol tests, and other screenings that can help identify potential health issues. Beyond specific screenings, health risk assessments can provide a wealth of data that can be used to tailor the wellness experience for each plan participant.
  4. Exercise and fitness activities — Many wellness incentive programs include opportunities for employees to engage in physical activity and exercise, such as on-site fitness facilities, group fitness classes, or organized sports teams. One study showed that regular physical activity is associated with important health benefits, including reduced risk for cardiovascular disease, stroke, type 2 diabetes, certain types of cancer, and depression.
  5. Nutrition support — Wellness incentive programs may offer resources and support for employees who are interested in improving their nutrition, such as healthy eating guides and meal planning tools. Beyond educational support, many companies are shifting from cafeterias and break rooms full of vending machines with fatty snacks to healthier options like fruits and nuts.
  6. Stress management — Many wellness incentive programs include stress management resources, such as meditation and mindfulness classes, stress reduction workshops, and access to mental health support services. Especially in this post-COVID era, stress, anxiety, and depression are being reported at all-time high levels among employees.
  7. Tobacco cessation — Wellness incentive programs may offer resources and support for employees who want to quit smoking or using other tobacco products. Not only is tobacco use associated with a variety of health conditions, but smokers are also 28% more likely to have high presenteeism (lost productivity because of illness) compared to non-smokers.

How to Set Up an Employee Wellness Incentive Program

While setting up a wellness incentive program doesn’t necessarily need to be a months-long process, it is important to start with your organizational goals and make sure that you’re engaging your workforce from the beginning. Getting buy-in from your leadership team and employees will increase participation rates and the likelihood of success.

  1. Define your goals — Start by deciding what you want to achieve with your employee wellness incentive program. This will help you determine the specific components and activities that should be included in the program. It’s important to involve your leadership team in this process. Often, organizations will create a wellness committee to oversee the planning and implementation of a wellness incentive program.
  2. Engage employees in the planning process — Involve employees in the planning process to ensure that the program meets their needs and interests. You can gather input through surveys, focus groups, or other methods. Employee buy-in is key. If employees don’t trust an employer’s motives for a wellness incentive program, it may ultimately be unsuccessful. In fact, employers view low engagement as the greatest obstacle to their wellness initiatives.
  3. Choose a program provider — Decide whether you want to work with your existing health insurance provider (who may already offer a wellness incentive program or wellness benefits), an outside provider, or if you want to manage the program in-house. If your company already uses an EAP, they may offer wellness benefits or programs included in their services. In fact, our study found that 76% of Northeast Ohio employers have an EAP in order to encourage employee wellness.
  4. Develop a budget — Determine how much money you are willing to invest in the employee wellness incentive program and allocate funds accordingly. It’s important for organizations to carefully consider the potential costs of programming, participation, and incentives.
  5. Create a plan — Develop a detailed plan that outlines the specific components and activities of the employee wellness incentive program, as well as the timeline and any necessary resources. Consider elements like staffing, program materials, tracking and/or data, recognition, and incentives.
  6. Launch the program — Once you have a plan in place, launch the employee wellness incentive program and promote it to employees to encourage participation. The most important element here is communication. Continually communicating program benefits, offerings, and incentives is an important step toward engaging employees. Don’t forget to communicate in a variety of media, including traditional and electronic methods.
  7. Monitor and evaluate the program — Regularly monitor and evaluate the employee wellness incentive program to ensure that it is meeting its goals and making a positive impact on employee health and well-being. Some key metrics you can use to evaluate the success of the program include:
    • Participation numbers
    • Direct claim costs over time
    • Indirect costs attributable to health issues (like time lost due to disability or illness)
    • Usage rate of benefits
    • Benchmark data on health care premiums and employer cost-sharing trends

Developing a Culture of Wellness

Whether you’re considering implementing a wellness incentive program or looking to improve upon an existing wellness incentive program, ERC and ERChealth can help support your organization’s commitment to wellness.

ERChealth is one of Ohio’s leading providers of health insurance for small- and mid-sized businesses, uniquely positioned to help employers take control of their health insurance costs through preventive care and workplace wellness. Learn more at