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The Greek author and philosopher Plato said it best in The Republic when he wrote, “Necessity is the mother of invention.” During these challenging economic times, employers are seeking alternative solutions to control rising health care costs in order to maintain market share and profitability.
According to the National Coalition on Health Care, employee health care costs are rising at a rate of 6.9 percent annually, which is two times the rate of inflation. Health care spending in the United States represents 17 percent of the Gross Domestic Product (GDP), and the average cost of care for each person in the United States is around $7,900 per person.
Much of the burden for covering the cost of care for employees falls upon employers. In 2008, the annual premium for an employer health care plan covering a family of four was $12,700. This was the first year that the annual employee health care premiums surpassed the gross pay of full-time, minimum wage workers at $10,712.
National surveys show that the primary reason many people are uninsured is because of the cost of health insurance coverage. Rather than pay the price for health coverage charged by insurance companies, many individuals elect to assume the risk and forgo health coverage altogether.
Other more inventive employers are actively looking for alternative ways to reduce health care costs through a variety of cost cutting methods. Corporate wellness programs are quickly becoming the solution of choice with an average return of $3 for every $1 spent. Here are five of the top reasons why employers are choosing Employee wellness programs to battle risking health care costs:
1. Decreased Health Care Costs – Corporate wellness programs can literally save employers money from health care costs. Fully-insured corporations tend to see higher returns on investment as they are self-funded and every dollar saved literally goes back into the employer’s pocket.
2. Reduced Absenteeism – Healthier employees spend less time away from work. This means that products and services can be delivered more efficiently, there is less paid time off required, temporary employees are needed less often to cover for sick employees, and other employees are less likely to become ill.
3. Increased Productivity – There is a strong correlation between employee health and employee productivity. Employee Wellness programs can decrease stress, improve concentration, enhance communication between departments and employees, and improve the job satisfaction of employees.
4. Increased Employee Loyalty – Wellness programs are perceived as an employee benefit. By maintaining an active corporate wellness program, it is easier to recruit future employees and keep current staff members from switching companies or working for competitors.
5. Reduced Presenteeism – Presenteeism is the negative result caused by sick employees who continue to work. Presenteeism can dramatically decrease employee morale and cause other employees to become sick when they would otherwise have not gotten sick. Corporate Wellness programs improve the aggregate health status of the population, thus decreasing presenteeism.