Are employee wellness programs a flop? The evidence points to yes.
Over the past several decades, many companies have created wellness programs that aim to improve the lives of employees outside of the workplace, improve performance at work and lower health care costs. Wellness has also expanded to include financial wellness, psychological wellness and all other kinds of wellness. Creating incentive programs to get employees to eat healthier foods, exercise and schedule medical screenings has become quite an industry. On average, companies spend more than $500 per employee per year to achieve these goals. It sounds fine except for one caveat: wellness programs don’t appear to work.
Al Lewis and Vik Khanna, well-regarded experts in disease management and health care, have analyzed a number of academic studies on employee wellness programs. They have arrived at the conclusion that they don’t lead to sustained improvements in employee health and they don’t lower employer health care costs.
Small-business owners should take note. An important component of Obamacare legislation centers on employee wellness programs, offering incentives for small businesses to offer them. These incentives take the form of reduced tax liabilites. If your company spends $521 per employee on wellness programs, then assuming you are at the 35 percent tax bracket and profitable then your actual cash cost, after tax incentives, would be $339.
About small business finance expert Mike Periu
Mike Periu has experience in small business finance. He founded Proximo, LLC a company that offers consumer and small business training services focused on technology and money.
Mike Periu teaches individual empowerment through entrepreneurship and financial literacy. He has appeared 500+ times on television and radio. Visit the Reach and Media pages of his website to learn more about where he has appeared.
You can read more of Mike’s articles on his blog or at American Express OpenForum, Yahoo! Finanzas and the Huffington Post.
Mike has a degree in International Business and Finance which he received at Georgetown University in Washington, DC. He received a Fellowship from the Kauffman Foundation for the Labs for Enterprise Creation program in Kansas City.
