Employee Wellness Programs Reduce Health Care Costs

The top concern of small business owners according to a survey conducted every four years by the National Federation of Independent Business is the high cost of health insurance. In fact, it’s been their top concern for the past five surveys, according to Paul B. Brown’s Small Business Tool Kit column in the New York Times.

High health care costs have reigned for more than 20 years now, and small business owners feel helpless to reverse the situation and ease their collective burden. But are they really helpless?

“Common sense says employees who are healthier and in better shape file fewer claims than those who are not, reducing the cost of their employer’s insurance,” Paul B. Brown writes.

Most people would argue that employers have no control over the health of their employees, but as Mina Kimes writes in her recent Fortune Small Business (FSB) article “Lose Weight or Else,” there is a growing number of employers proving that argument wrong.

Many employers are offering programs that help employees lose weight or quit smoking, as well as cash-based incentives for going to the gym. “In fact, 46% of employers offer incentive-based wellness plans, according to a recent study by Watson Wyatt and the National Business Group on Health, and that proportion is expected to grow to 70% by 2009,” according to Kimes.

With these types of programs, not only are employers seeing healthier employees and increased productivity, they are also seeing a decrease in the cost of health insurance. One such example is Rockford Acromatic, a small car-parts manufacturer that saw a 19 percent drop in claims and $60,000 in annual savings after implementing a weight-loss competition with cash prizes, according to FSB.

The savings can give small business owners the break they’ve been waiting 20 years for. But even though the benefits may ultimately outweigh the drawbacks, programs like these need to be implemented with caution. Some people might see them as discrimination if they are physically unable to participate in the program, causing employers to run the risk of being sued.

Many employees argue that their health is not their employers business, but if employers are the ones footing the bill for the health choices of their employees, then I believe that they at least have the right to attempt to implement mutually beneficial changes, so long as programs aren’t mandatory and opting out doesn’t jeopardize employment.

Health and wellness needs to be taken seriously by both employers and employees. I read on theStreet.com the other day that if current trends persist, within the next 50 years (and for the first time in hundreds of years) obesity will cause life spans to decrease by about two to five years. If no initiatives are taken, then health-care costs for employers are going to continue to skyrocket. But implementing simple programs can be life changing for your employees and enough to keep your health care costs in check. So I urge you to consider the benefits of a good employee wellness program.