What Are Employer Sponsored Wellness Programs?

May 13, 2022 - What are employer-sponsored wellness programs and how are employers using these programs to advance employee wellness?

The need for greater employer involvement in employee health and wellbeing is well-documented.

At the beginning of 2021, 40 percent of employees rated their overall wellbeing as positive and 83 percent stated that employer wellness programming improved their employment experience, according to an Alight survey. However, only 38 percent of employees stated that their physical wellbeing was positive and some reported social determinants of health challenges.

In response to the demand for more engagement in employee health, employers have leveraged wellness programs.

HealthCare.gov defines a wellness program as:

A program intended to improve and promote health and fitness that's usually offered through the work place, although insurance plans can offer them directly to their enrollees. The program allows your employer or plan to offer you premium discounts, cash rewards, gym memberships, and other incentives to participate.

These wellness programs can serve a variety of purposes.

Seven out of ten employers leverage wellness programs to reduce presenteeism, according to a PwC survey. Almost two-thirds of employers (63 percent) offer these programs to reinforce company culture. Four out of ten employers use wellness programs to improve financial wellness among employees and a third of employers implemented wellness programs to improve employee engagement.

Experts on employers’ wellness efforts have highlighted multiple types of wellness that employer-sponsored wellness programs may address, as well as certain challenges and key strategies for success.

Types of wellness programs

While physical wellness is often a central focus for wellness programming, a whole-person care approach to coverage and benefits requires payers and employers to acknowledge the various facets of wellness.

There is no standardized list of wellness categories. Wellness has been divided into as many as nine domains, as listed on the Centers for Disease Control and Prevention (CDC) website. However, five domains of wellness are prominent across wellness resources: financial or economic, physical, environmental, emotional, and social.

Some of these categories, such as physical and emotional wellness, are familiar and widely-discussed among employers and payers. However, other domains are less common.

Financial or economic wellness is defined as the state of having enough resources to have freedom of choice and security. Employer engagement in employee financial wellness rose to a record high in 2020 and 2021, according to a Bank of America study. 

In 2021, financial wellness programs were present among nearly 40 percent of companies with under $20 million in retirement plan assets, half of the companies with $20 million to $100 million in retirement plan assets, and almost 60 percent of companies with more than $100 million in retirement plan assets.

Environmental wellness refers to the health of employees’ daily surroundings—their homes, workplaces, and neighborhoods. The National Institutes of Health (NIH) addresses safe cleaning products, air quality, water safety, and other factors in a space that can impact health as parts of environmental wellness.

Social wellness is related to how employees navigate relationships and participate in their communities. The NIH’s toolkit for social wellness refers to forming connections, self-care while caregiving, family health habits, and being active as elements of social wellness.

Five domains of wellness are prominent across wellness resources: financial or economic, physical, environmental, emotional, and social.

Wellness programs may include features such as wellness events like resilience programs, services such as preventive health screenings for chronic conditions, and resources like online assessments and training programs. The goal is to encourage members and employees to make positive decisions about their health, from forming healthy eating habits to quitting tobacco.

Biometric screenings for measures such as blood pressure and cholesterol were most commonly ranked as the most valuable wellness program features with 51 percent of employers ranking biometric screenings as the most valuable wellness program in a PwC survey. 

Employee assistance programs followed in employers’ estimation, with 42 percent of employers ranking it as the most valuable wellness program. Employee assistance programs were the most commonly offered wellness program, offered by nearly all employer survey participants (98 percent).

Debate over efficacy

One of the biggest challenges that wellness programs face is the uncertainty around their efficacy.

One three-year study of a workplace wellness program that was offered to more than 48,000 employees found that self-reported health outcomes, clinical health measures, healthcare spending, utilization, and employment impacts did not change significantly as a result of the program.

The researchers noted it is hard to generalize the results of a specific wellness program.

However, a digital weight loss intervention program may result in positive patient outcomes, a separate study from Rally Health Inc. concluded. The study lasted three years and followed 4,790 program participants.

The digital weight loss intervention program successfully achieved savings that were 2.3 times higher than what the program cost to implement and the program participants’ costs were 12 percent lower than the control group’s costs.

Given the range of research on this subject, it may be unsurprising to find that employers and employees have varying perspectives on wellness programs’ efficacy. 

Data shows that there is a significant divide between how senior management and middle management view these programs, both in the employee and the human resources management structure. Senior employees and human resource executives or benefits managers tend to agree that wellness programs are important, but do not lower costs.

Overall, nine out of ten human resource executives and employees say that employers of choice are employers that offer health screenings and wellness programs, but they do not necessarily agree that these programs lower costs for employers. 

Successful wellness programming strategies

In the twenty-first century workplace, wellness programs should account for the hybrid work model. Sixty percent of employers have stated that most of their workforce would be working partly from home and partly from a work site in 2022, a trend that has implications for employer-sponsored wellness programming. 

Employers can leverage both virtual wellness programming and on-site wellbeing programs to meet employees where they are at.

“We expect that, when employees do come back to the worksite and these different offices or locations are fully functioning, employers will bring back some of those on-site opportunities, whether it was a fitness class hosting on-site, bringing back counselors on site,” Brenna Shebel, vice president at Business Group on Health, told HealthPayerIntelligence.

Shebel suggested that employers looking to create successful wellness programs will partner with their employees to create those opportunities. Partnership with employees could take the form of sending out surveys or launching employee focus groups to gauge employee interest in certain types of wellness programs. Employers can also work with employee resource groups to assess employees’ needs.

Incorporating social determinants of health data into wellness programming is key to a wellness program’s success. This strategy addresses two key challenges that wellness programs face: an employer’s failure to address underlying causes for employees’ health conditions and an employee’s failure to take control of her own health.

“Whether it's a program, service, approach, culture, or whatever it is that employers are putting together that has more meaning for the employee, if you don't understand what is happening in their zip code, you are not going to be able to get them to engage appropriately with a provider,” Margaret Rehayem, vice president for National Alliance, told HealthPayerIntelligence.

She suggested that employers overlay their own, validated employee data with social determinants of health and demographic data from community sources. From there, employers can prioritize certain subpopulations and engage in workforce population health management, design a targeted intervention, and measure outcomes.

Interventions that are informed by social determinants of health data may require a phased approach that staggers solutions across the workforce instead of trying to address one issue across the entire workforce, Rehayem noted.

Employer organizations like the National Alliance of Healthcare Purchasers (National Alliance) have started offering resources for employers seeking to bolster their social determinants of health workforce insights.

In addition to incorporating social determinants of health, successful wellness programs are designed with a health equity mindset. 

Certain chronic diseases that employers often seek to address through wellness programming—such as obesity and diabetes—have a disproportionate impact on racial and ethnic minorities. As a result, wellness programs that effectively reduce the prevalence of these chronic diseases will also seek to advance health equity.

In a flipbook promoting health equity in employers’ diabetes and obesity intervention efforts, the Northeast Business Group on Health (NEBGH) recommended that employers take seven steps to ensure that their interventions are designed and implemented with health equity in mind. 

These steps included incorporating the chronic disease interventions into overarching diversity, equity, and inclusion strategies, assessing programs for care gaps and inequities, reducing financial barriers to chronic disease prevention and management tools for minority populations, and adopting a value-based insurance design.

Recognizing the importance of health equity in employer wellness programs, the Business Group on Health’s 2022 Best Employers Award for Excellence in Health & Well-being expanded its criteria to include health equity measures and an additional citation for health equity. 

The citation identified employers that promoted health equity for the LGBTQ+ community, employees with disabilities, or racial minorities. In 2022, eight out of 44 employers were awarded the excellence in health equity award, including two major payers.

After acknowledging the full spectrum of wellness—including its financial component, social elements, and the full range of domains in between—employers can better implement wellness programs that serve their employees healthcare needs.