NAIFA's Advisor Today Keyword(s)

 E-mail   Print  Share

The Business Case for Wellness Programs

Help your business clients understand that a comprehensive wellness plan is a good financial investment.

By Jerry L. Ripperger, ACS, ALHC, FLMI, HIA, MHP

Many of your business clients probably have more potential projects than they have resources to undertake them. They need to make difficult choices to forgo the opportunities that could add value to their businesses. They are looking to you, their valued advisor, to help make some of these important decisions.

Implementing a comprehensive wellness program is probably on your clients’ list of potential projects. But if they are like most employers, it hasn’t made it to the top of the list. Many look at wellness programs as an investment in their employees or benefit program rather than an investment in their company’s financial health.

You can help your clients understand a wellness program’s potential sources of return and benefits. Once they see the potential, they will likely want to implement one.

Wellness programs help participants get healthier and reduce their need to seek medical care. This has a direct impact on the cost of providing health-care benefits. A Principal Financial Group study examined more than 3,400 wellness participants and 9,000 control group members over 36 months to determine the impact that a comprehensive wellness program had on costs. The study found that health-care cost for the wellness participants was 7.2 percent less than that of the control group. This is equal to a return on investment of 2 - 3:1. Additionally, because the positive effects of a wellness program are cumulative, the longer the program is in place, the more potential it has to reduce costs.

Several benefits
Not all wellness initiatives are created equal; therefore, their returns will not be equal. Comprehensive wellness programs have six core components: comprehensive measurement and reporting; a culture of wellness at work; observation and evaluation; targeted health management; year-round engagement; and positive lifestyle information and education.

The focus of these programs is the prevention and reduction of risks associated with common health conditions. The benefits are both financial and clinical and there are several sources of financial return.

For example, a healthy work force has less absenteeism, which allows your client to generate additional revenue and earnings. It also lets the client build customer loyalty, as customers know they are working with an organization they can depend on. Perhaps you have experienced or know someone who has experienced the frustration of finding that something wasn’t going to happen as scheduled due to someone’s absence. Many times, that delay costs the company a customer.

A healthy work force also has less “presenteeism,” which occurs when individuals go to work in spite of their being ill, decreasing productivity and potentially making their coworkers ill. This can produce significant financial consequences to the firm. For example, if someone goes to work with influenza and infects several coworkers, the actual financial impact is much larger than just his reduced productivity.

Healthy employees also have fewer injuries, which equal fewer workers’ compensation claims. In addition, healthy employees have fewer disability claims.

The combination of reduced absenteeism and “presenteesim,” lower health-care costs, and fewer injuries and disabilities leads to more productive employees. More productive employees lead to a healthier bottom line for the company.

An investment for the company
Clearly, there are powerful financial reasons for your clients to implement a comprehensive wellness program. The clinical improvements are equally impressive. A Principal Financial Group study illustrates significant health improvements in many clinical areas. Specifically:

  • 45 percent improved their systolic blood pressure by at least 15 percent.
  • 36 percent improved their total cholesterol value by at least 15 percent.
  • 41 percent improved their HDL cholesterol value by at least 15 percent.
  • 78 percent improved their triglyceride value by at least 15 percent.
  • 42 percent improved their glucose value by at least 15 percent.

In addition, 44 percent reduced their body fat percentage. These results show that participants made changes that improved their quality of life.

Given the number and magnitude of the sources of return, a wellness program is not just an investment in your client’s employees or benefits program; it is also possibly the best investment your client can make in the health of his business. As a trusted advisor, you can help him improve the health of his employees and maximize the value of his business.

Jerry L. Ripperger, ACS, ALHC, FLMI, HIA, MHP, is director of business development for the Principal Financial Group.

See other articles about Health Insurance

Conference Newsletter

Contact Us   |   Reprint Permission   |   Advertise   |   Legal Notices   |   Join NAIFA   |   Copyright © Advisor Today 1999-2017. All rights reserved.

AT Blog
Product Resource
Digital Magazine