No Wellness Program? The Cost May Surprise You

High healthcare costs continue to be a concern for American businesses. The average annual health insurance premium is more than $7,900 for individual employees and nearly $22,460 for families. Since 2012, average premiums for family coverage have increased 43%. As of 2019, the total healthcare cost of the nation was $3.8 trillion, or 17.7% of the GDP.

Employer-based health insurance premiums have risen by 47% in the past ten years. While some years see less of an increase than others, employers have seen healthcare costs rise anywhere from 3.7% to 6.5% per year since 2019 and estimates suggest they will rise between 5.6% and 7.0% in 2023.

And much of the higher cost has been transferred to employees. Since 2012, workers’ contributions to premiums have gone up 39%. In 2022, the average employee was financially responsible for 17% of their individual insurance premium, and 28% of their family’s premiums. In addition, employees also pay increasingly higher co-pays at the doctor’s office and higher deductibles for hospital services.  

As a result of this trend, both companies and employees are highly motivated to keep healthcare costs as low as possible. What can your organization do to help trim healthcare costs, keep your population healthy, and keep premiums at a minimum?  

A good first step is investing in a comprehensive wellness program, using data-driven insights from a robust health risk assessment (HRA). A good wellness program can improve your population health and help keep increases to a minimum. Here’s why....

Impact of Chronic Disease on Healthcare Costs

90% of annual U.S. healthcare costs are for people with chronic conditions including heart disease, cancer, lung disease, diabetes, obesity, and high blood pressure. According to the CDC, 6 in 10 adults have one chronic disease and 4 in 10 adults have two or more chronic conditions. Among workforce populations, chronic conditions cost employers $36.4 billion/year. Preventing chronic illness through healthy lifestyle habits can significantly reduce healthcare costs for both employers and employees. So, what’s at the root of America’s chronic health conditions? Our health habits.

America’s Costliest Health Habits

Lifestyle factors such as smoking, poor nutrition, physical inactivity, poor sleep, and excessive use of alcohol are direct risk factors for chronic disease.  

According to the CDC:

• 9 in 10 Americans consume too much sodium.
• 2 in 10 people under 20 and nearly half of adults have obesity.
• Fewer than 1 in 10 adolescents and adults eats enough fruits and vegetables.
• More than 1 in 3 adults has prediabetes.
• 1 in 5 adults smoke.
• 1 in 4 adults say they binge drink.

This is an overview of risk factors for Americans, and the risk factors of your workforce population may be different. Understanding the health habits of your specific employee population is essential to implementing an effective wellness program strategy. That’s where the Health Risk Assessment (HRA) comes in.

Wellness Programs Improve Health, Reduce Costs to Employees and Employers

Rather than cutting benefits or shifting costs to employees, many companies today have worksite wellness programs. These programs help address costly and chronic health concerns in a population and can be one way of controlling high healthcare costs. According to a 2022 Kaiser Foundation Employer Health Benefit Survey, 85% of large employers (200 or more workers) offering health benefits also offered a workplace wellness program—up from 70% in 2008.  

The priorities of these programs are focused on the individual, while benefiting the employer:

• Curtail health costs
• Retain good workers
• Attract good employees
• Reduce absenteeism
• Improve employee productivity, morale, and safety

The most common health screening tool used by these companies is a Health Risk Assessment (HRA).  As of 2022, 62% of those offering wellness programs gave employees the option to complete an HRA.  

Companies that use HRAs gain valuable information about risk factors specific to their workforce, so they can identify areas of concern. Creating data-informed wellness programs can meet employees where they are in their health journey today and have a better chance at improving employees’ current health and future health.

Some of the valuable insights an HRA can collect about your population include amount of daily exercise, mental health, social connection, sleep habits, eating habits, and their readiness to change.

Better Health Also Reduces Intangible Employer Costs

There are other benefits of a robust, well-organized wellness program that aren’t as easily measured. Poor health results in higher rates of absenteeism, disability, and productivity. In fact, productivity losses related to health problems cost US employers an average of $1,685 per employee, per year. Not only that, voluntary employee turnover costs US businesses $1 trillion per year. Illness and chronic conditions also lead to 1.5 billion days of illness-related absence each year.

On the other hand, employers promoting wellness see an 18-30% reduction in turnover rates. And healthy employees take fewer sick days, report higher job satisfaction, and show higher levels of morale. The potential for savings from a well-designed wellness program can reduce or even eliminate some of these less quantifiable costs.

You Have a Choice. Will Your Organization Be Reactive or Proactive About Wellness?

You can choose to take a reactive approach to healthcare—paying for health problems after they develop and watching your healthcare costs climb. Or you can take a proactive approach—where you invest in a HRA to inform a wellness program to improve the health of your employees, trim healthcare costs, and improve productivity. The proactive wellness approach clearly makes good business sense—for employees and employers.

Jump into Action

Ready to take the next step and find the HRA that is right for your organization? Choosing the Right HRA Checklist offers a complete list of important items to consider including: “must haves,” content and design, security and compliance, reporting, and more. Choosing the Right HRA is essential to the success of your organization’s wellness program. Download the checklist now.