What’s The ROI On Employee Wellness Programs?

Small Business Employees Take Advantage of Company Wellness Programs

In a survey by the Society for Human Resource Management, about three-fourths of HR professionals reported that their organizations offered wellness incentives in 2014. Of this number, about two-thirds reported that their wellness program was “somewhat effective” or “very effective” in reducing healthcare costs.

So, wellness programs reduce business costs. But how do you, a small business owner, determine how much you can save on healthcare expenses? More specifically, how can you maximize your return on investment (ROI) for implementing an employee wellness program?

ROI For Small Business Wellness Programs

ROI for wellness programs are determined by two baseline factors:

  1. Your overall savings in healthcare costs.
  2. Your boost in productivity due to reduced sick days.

Here’s an example: With an ROI of $2, you get a $2 return for every $1 that you spend. Therefore, a positive return — i.e. anything over $1 — will justify the costs of implementing an employee wellness program for your small business.

What’s Your Company Wellness ROI?

ROI for wellness incentives depends on your specific organization. Consider some of these statistics:

  • Within 10 years of implementing employee wellness initiatives, Johnson & Johnson had an ROI of $2.71. (They also saw a net savings of $250 million in healthcare costs.)
  • In a RAND Wellness Program Study in 2014, the overall ROI for companies was $1.50. (Note: ROI varied depending the type of program implemented, which we’ll discuss below.)
  • According to another report, companies with effective programs earned 40% more revenue than those with fewer (or no) programs.

We can’t estimate the exact ROI for your small business. But we can tell you that, based on the stats, you’re likely to see a positive ROI after implementing some form of wellness program for your employees.

Benefits Of Employee Wellness Programs

We mentioned two quantifiable benefits to wellness programs for your business: healthcare cost savings and employee sick leave. But consider all the added, albeit less specific, benefits of implementing a wellness program.

Tax Incentives

Under the Affordable Care Act, the government can offer tax incentives and grants to U.S. companies that implement certain employee wellness programs. In fact, if employees meet certain health goals, employers and employees could qualify to save up to 30% on the cost of their healthcare coverage!

Satisfaction And Engagement

According to a survey, employees who received wellness incentives were 38% more engaged, 18% more likely to “go the extra mile,” and 17% less likely to quit that year.

Therefore, wellness programs encourage company loyalty, satisfaction, and increased morale.


This category does not include missed work days. Instead, it speaks to the general rate of productivity while the employee is at work. If an employee is sick, stressed, inactive, or sleep-deprived, they will not complete their daily tasks as efficiently or effectively as those who are fit, healthy, and well-rested.

Now think about the consequences of an employee’s mood and health. Let’s say Employee A has a hectic schedule that barely gives her time to breathe. Employee B has figured out ways to reduce stress and manage her health risks.

When A and B interact with other employees — through meetings, reviews, or work breaks — who do you expect to encourage a more positive mood and work environment?

When Employees A and B get on the phone with a client or consultant, who do you trust to achieve better results?

Employee B, of course. Here’s the bottom line: Healthy employees cost you less. They’re also more likely to stay with your company.

Types Of Employee Wellness Programs

You get it: employee wellness programs are helpful. But what exactly are they? And which programs should you implement for your small business?

In general, programs can be broken down into two categories: disease management and lifestyle management.

Disease Management

Disease management includes programs that focus on helping employees who already have a chronic disease, such as heart disease, diabetes, and emphysema.

The objective of disease management programs is to reduce hospital admissions and encourage employees to take their medications, get regular check-ups, and keep up with their prescribed health regime.

Incentives or services for a disease management program could include:

  • Screening employees for health risks
  • Offering one-on-one counseling and/or coaching
  • Providing health insurance plans that cover important health benefits, including screenings, medications, etc.
  • On-site vaccinations and screenings
ROI On Disease Management

Disease management programs were responsible for a whopping 87% of companies’ healthcare cost savings; they generated a 30% reduction in hospital admissions, plus a $3.50 ROI. Now those are impressive results!

Lifestyle Management

Lifestyle management includes programs that focus on reducing health risks, such as smoking, obesity, and stress.

Incentives or services for a lifestyle management program could include:

  • Smoking cessation programs
  • Gym memberships or discounts
  • Discounts or subsidies to local health and wellness practitioners
  • Stress management training
  • Access to a 24-hour crisis hotline
  • Health fairs
  • Goal setting
  • Educational campaigns
  • Company-wide physical activity competitions
  • On-site fitness, yoga, meditation, or stretching classes
  • On-site fitness centers
  • Healthy food choices in the office
ROI On Lifestyle Management

Lifestyle management programs were responsible for 13% of companies’ healthcare cost savings; they generated a $0.50 ROI.

Compared to disease management programs, lifestyle management produced significantly less ROI and cost savings.

So, if you want the most ROI for wellness initiatives, invest in programs that target employees who already have chronic diseases.

Set Up A Wellness Program Today!

We all get stressed at work. We all have good and bad days. But if you were offered help setting up a program to mitigate those bad days — and save your company money you would say yes!

Of course, the right wellness program depends on your budget and the health status and needs of your employees. To determine which incentives to implement for your small business — and figure out if you qualify for a tax break — talk to a licensed health insurance agent at Regency West. Our friendly healthcare professionals will work with you to implement an effective, affordable wellness program in your employee benefits package.