Do firms profit from wellness programs?

READY, STRETCH: From left, Cooley Group workers Casimiro De Pina, utility inspector; Debra Bedrosian, vice president for human resources; John Paulo, rear, driver;  Danny Bernardo, utility inspector; and Angelo Correia, team leader, stretch during their shift. / PBN PHOTO/ MICHAEL SALERNO
READY, STRETCH: From left, Cooley Group workers Casimiro De Pina, utility inspector; Debra Bedrosian, vice president for human resources; John Paulo, rear, driver; Danny Bernardo, utility inspector; and Angelo Correia, team leader, stretch during their shift. / PBN PHOTO/ MICHAEL SALERNO

(Updated 12:20 p.m. to reflect corrected information on Cooley Group costs)

When employees lead unhealthy lifestyles, work productivity suffers and employers’ health care costs can also go up if insurance claims rise.

Such common scenarios are one reason many companies in recent years have turned to wellness programs, to make it easier for, and in some cases incentivize, employees to look after their own health.

But increased employee wellness doesn’t always improve the corporate bottom line.

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A Society for Human Resource Management report found over the past year that 66 percent of businesses queried decreased investment in health-related benefits and 19 percent decreased investment in wellness programs, specifically. In addition, while the report did not break down results on a regional basis, it found on-site flu vaccinations, health coaching and premium discounts for nonsmokers all decreased from 2012 and 2015.

Jennifer Schramm, manager of workplace trends and forecasting for SHRM, said decreased investment in wellness programs can be attributed to companies adopting a more strategic financial approach.

“[Companies are] seeing which are working most successfully and weeding out those that aren’t,” she said.

Schramm said the downward trend is simply a “plateauing” in popularity. Cost is one of many companies’ biggest challenges and, while wellness programs are designed to cut health care expenses, she said, companies often cut programs to the bare minimum to save money while still supporting employees.

A low-cost example is wellness information, such as newsletters and resources on chronic diseases. Seventy-two percent of queried companies in 2016 offered wellness information, up from 54 percent in 1996, while the number of on-site health-screening programs fell 22 percentage points, to 31 percent in the same time frame.

In addition, the study found rewarding participating employees, with everything from financial benefits to paid time off, increased in the last five years.

“That type of approach is an investment, but an investment tied to a very specific behavior that is expected to yield savings,” said Schramm.

However, even at a high participation rate, wellness programs might not provide as much of a return on investment as companies hoped. That may be another reason to cut a program, said Schramm.

Cooley Group and Banneker Industries, both recognized in PBN’s 2016 Healthiest Employers competition, offer wellness programs to their employees but have seen different results.

Debra Bedrosian, vice president for human resources at Cooley Group in Pawtucket, said the company has offered a wellness program for nine years and participation has grown steadily, from 20-85 percent, as employees have helped develop it.

Bedrosian said wellness programs will not be dropped from the company’s budget, but they come at a cost; wellness and insurance account for 13.2 percent of the annual $10.5 million operating budget, to be exact.

Health-plan redesigns were initiated because even with 25 fewer employees, the total cost of insurance coverage was higher than it had been for a larger workforce. The firm employed 140 locally at the beginning of the year.

“The intent when we first started was two-fold,” Bedrosian said. “One was to create a better, healthier work culture for our employees and the other was to reap the benefits of a healthier workforce – the cost of the benefits would decrease because the employees would be healthier.”

But, she explained, “That didn’t happen because even though they may be healthier – and we direct and educate them … the cost of the insurance went up.

“We did not see the return on investment … and we still don’t see any benefits because the insurance companies are having their rate increases approved,” she added, declining to provide details on the firm’s insurance cost increases.

For North Smithfield-based Banneker Industries’ President and CEO Cheryl Snead, wellness programs have shown a valuable return on investment.

Boasting a 100 percent participation rate, Snead said, all 42 local employees are involved some way or another – leading to fewer sick days and workers’ compensation cases.

Productivity has increased, said Snead, because employees are using their time off how they would like rather than recuperating in bed. This is a benefit for a small company, she said, which “[doesn’t] have lots of resources that can duplicate efforts. Everybody is important and we need them at work.” •

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