Benefits

Are Workplace Wellness Programs a Waste of Time and Money?

“Workplace wellness programs cover over 50 million workers and are intended to reduce medical spending, increase productivity, and improve well-being. Yet, limited evidence exists to support these claims,” conclude three university researchers in a newly published study.

Wellness programs

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Damon Jones (University of Chicago), Julian Reif (University of Illinois at Urbana-Champaign), and David Molitor (University of Illinois at Urbana-Champaign) designed and implemented a comprehensive workplace wellness program for a large employer with over 12,000 employees, randomly assigning program eligibility and financial incentives at the individual level. Over 56% of eligible employees participated in the program.

The researchers noted that, during the year prior to the program’s inception, program participants had lower medical expenditures and healthier behaviors than nonparticipants. However, they did not find “significant causal effects of treatment on total medical expenditures, health behaviors, employee productivity, or self-reported health status in the first year.”

Wellness programs may, however, “act as a screening mechanism,” the researchers concluded: “[E]ven in the absence of any direct savings, differential recruitment or retention of lower-cost participants could result in net savings for employers.” In other words, if the existence of a wellness program helps to attract and retain healthier employees, then employers could see a reduction in their healthcare costs as a result.

The study results were published by the National Bureau of Economic Research in a January 2018 working paper and are available here.

JenJennifer Carsen, JD,is a Senior Legal Editor for BLR’s human resources and employment law publications, focusing on benefits compliance. In the past, she served as the managing editor of California Employer Resources (CER), BLR’s California-specific division, overseeing the content of CER’s print and online publications and coordinating live events and webinars for both BLR and CER.

Before joining CER in 2005, Ms. Carsen was a Legal Editor at CCH, Inc. and practiced in the Labor & Employment Department at Sidley & Austin, LLP in Chicago. She received her law degree from the New York University School of Law and her B.A. from Williams College. She is a member of the New Hampshire Bar Association.

Questions? Comments? Contact Jen at jcarsen@blr.com for more information on this topic.