Evaluating employee health costs

The time has come for employers to start paying an active role in their employee's health. Why, because employee health costs are outstanding and cost you over $60 billion in lost production costs. Employee lifestyle choices (lack of exercise, poor diet, smoking, etc) are taking their toll on health insurance companies and their employers are being forced to pay for their employees poor choices.

Smoking, obesity, and lack of exercise contribute to more than half of the costs contributed by unhealthy employees. Employers are being forced to pay a large tab for disability insurance, life insurance, and health insurance. The risk of unhealthy employees is great and employers are not charging outlandish rates to keep their health insurance. Smoking costs employers about $64 billion in early death, disability insurance, and lost productivity. Obesity costs employers even more than smoking does because they are also at an increased risk for multiple health problems. Employers are paying out over $3.9 billion in sick leave benefits from their employees that are unhealthy.

If you have smokers and obese employers, you can kiss goodbye to your low health insurance premiums. You will automatically be pushed into the "high-risk" category and the only thing you can do about it is to start charging your employees more money for insurance coverage. High-risk employees cost more in disability claims, worker's compensation benefits, medical claims, absenteeism, and productivity.

To lower costs, employers have started taking an active role in their employee's health. Several companies offer incentives to get their employees to start improving their health. Other companies are penalizing their employees for their lifestyle choices that are costing the company billions of dollars. The return on investment (ROI) of wellness programs is quite impressive. Most companies will see a $3-$20 return for every $1 they invest into a wellness program. The ROI is almost immediate for companies. When a person stops smoking, their body immediately starts to cleanse itself of the harmful toxins. Within 30 minutes, their blood circulation improves and within 24 hours, their risk of developing multiple health problems decreases.

Depending upon how much you are willing to invest. You can see a small return or a large one. If you hire personal trainers, dieticians, and medical staff members, you will have a large investment. Bigger companies not only invest in trained professionals, many of them will invest money into an on-site exercise facility or they will offer gym memberships.

Before you make such a large investment, conduct some employee surveys to see if your employees are interested in participating in the wellness program. Simply improving their own health may not be enough to motivate some of your employees, you may need to take it one step further and offer large incentives to get them to participate. Cash incentives are always nice and this is normally favorable for most employees. Then there are the employees that prefer other incentives like time off work or an expense-paid vacation for two.

If your employees are not interested in participating in the wellness program, you need to be strict on your health policy. Encourage your employees to improve their health or start charging them more money for the additional expense they are costing the company. Let your employees know that you do care about their health and you want to find ways to improve their health. Give them a few months to lose some weight or to quit smoking or start exercising before you start charging them more money for their health insurance. This will demonstrate that you are willing to work with them and that you are truly implementing a health policy because you care about your employees.