Are Corporate Wellness Programmes a Waste of Money?

Under the US Patient Protection and Affordable Care Act (PPACA or ACA), employers who offer wellness and prevention programmes to employees are given greater support. But do such programmes actually improve employee wellbeing or reduce health care costs?

The US Department of Labour explains that, beginning in 2014, the ACA (otherwise known as Obamacare) will increase ‘the maximum permissible reward under a health-contingent wellness programme from 20% to 30% of the cost of health coverage, and [increases] the maximum reward to as much as 50% for programmes designed to prevent or reduce tobacco use.’ The agency claims that ‘workplace health programmes have the potential to promote healthy behaviours; improve employees’ health knowledge and skills; help employees get necessary health screenings, immunizations, and follow-up care; and reduce workplace exposure to substances and hazards that can cause diseases and injury.’

However, Tom Emerick, a benefits consultant and former benefits executive at Walmart, Burger King, British Petroleum, and American Fidelity Assurance, asserts, ‘Corporate wellness programmes do not reduce the cost of health plans…They simply do not work.’ Emerick argues that, for this reason, such programmes were abandoned during the 1970s and 1980s. ‘Back then, it sounded like it had huge potential,’ he said. ‘If you used wellness to improve your health, you should be able to reduce things like heart attacks and strokes. We did massive experiments with programmes much more extensive than just reimbursement and incentives. Sure, a lot of people got helped along the way, but it was never enough to offset the cost of it.’

Emerick adds that recent RAND Corp. research, which was commissioned by the Department of Labour and Department of Health and Human Services,  found that about half of US employers with 50 or more employees ‘offer wellness promotion initiatives’ such as weight loss programs, smoking cessation, education, and personalised health coaching. However, while there was ‘a lower cost trend in programme participants compared to non-participants…the overall difference on overall health care cost is not statistically significant.’

According to Glenn Riseley, president of the Global Corporate Challenge, ‘Programmes that offer workers cash to do the right thing undermine the messages of trust and responsibility that are essential to any vibrant and competitive company culture.’ Instead, Riseley believes that introducing elements that truly motivate employees, such as ‘competition, teamwork and online engagement,’ makes behavioural change in corporate wellness possible, as these things can foster personal responsibility for health improvement.

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