Do Company Wellness Plans Benefit Health? The Rules Are in Flux

Although company wellness plans benefit employee health, they can't be mandatory, and their voluntary nature hasn't caught on with everyone.

Company wellness plans may benefit employee health, but the rules about how they are administered are in flux, and many people don’t choose to participate.

Even if you love your work, are happy with your employer, and sit in a cushy office chair at your desk all day, your job could be dangerous to your health. Scientists have found sitting much of the day as countless working Americans do, is plain unhealthy. And if you tend to skip exercise after work and have packed on some extra pounds, your risk for obesity, type 2 diabetes, and other ills could be mounting.

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More health problems can mean higher insurance premiums for your company (and higher co-pays for you), more sick days, and less productivity on the job. So, to make the workplace healthier, many organizations are offering onsite wellness programs, which typically include risk assessments, exercise and weight-loss programs, and smoking-cessation help. Many employers offer premium discounts, cash rewards, gym memberships, and other incentives if employees participate in wellness plans.

In 2019, 84 percent of U.S. employers with 200 or more workers offered a workplace wellness program, according to Kaiser Family Foundation research.  

Are company wellness plans popular?

The getting-healthier-at-work idea hasn’t caught on with all employees. Many companies offer employees money to complete a health assessment, for example, but, even with the sweetener, only half of workers complete the assessment, according to a 2017 analysis. Only a third of employees do so in companies without the reward program.

The U.S. Equal Employment Opportunity Commission (EEOC) has brought several cases against companies that penalized workers who opted out.

Meanwhile, the agency issued new federal regulations that allowed financial incentives up to 30 percent of the cost of self-only coverage, which can be thousands of dollars. A federal district court found that the EEOC did not provide sufficient justification for its wellness program incentives limits and struck the new regulation down. The EEOC repealed its rules and is looking into other options.

“Employers certainly may have voluntary wellness programs — there's no dispute about that — and many see such programs as a positive development," said the late John Hendrickson, then regional attorney for the EEOC Chicago district. "But they have to actually be voluntary. They can't compel participation by imposing enormous penalties such as shifting 100 percent of the premium cost for health benefits onto the back of the employee or by just firing the employee who chooses not to participate. Having to choose between responding to medical exams and inquiries — which are not job-related — in a wellness program, on the one hand, or being fired, on the other hand, is no choice at all."   

Do wellness programs improve health?

According to a study by Texas A & M University, Baylor University, and MD Anderson Cancer Center researchers, the answer is yes — if they are run well and workers participate.

The key, the report concluded, is for comprehensive, accessible wellness programs, not just a few free passes to a gym and healthy eating information posted in a snack room. The result is healthier employees, greater productivity, and higher morale.

It can make a company’s bottom line healthier, too. For example, Johnson and Johnson’s wellness programs reduced the number of workers who smoke by more than two-thirds, lowered the number who have high blood pressure and are sedentary by more than half, and saved the company $250 million on healthcare costs over the past decade.

Creating wellness programs geared toward employees’ specific goals and needs can boost successful participation. A University of Rochester study found there were almost 9 percent fewer people who were overweight or obese after they participated in a two-year workplace weight-loss program designed with input from workers.

"Worksites are self-contained environments with established communication systems where interventions that modify food options and provide physical activity have the potential to reach large numbers of adults," said  Diana Fernandez, MD, PhD, an associate professor in the University of Rochester Department of Public Health Sciences who headed the research. "This study shows in particular that when employees are empowered to help shape wellness programs, these programs appear to result in meaningful improvements in health."

But there is some controversy over that conclusion. One reason: healthier people are more likely to participate, so it is hard to determine if differences in health outcomes reflect program effectiveness or the people who elect to participate.

Two randomized controlled studies found only limited improvements in health outcomes from employer wellness programs. The first trial, at the University of Illinois, found that a $200 incentive boosted participation in the health screening from 46.9 percent to 62.5 percent of employees. After a year of optional health coaching, disease management, and wellness classes, however, there was no effect on medical spending, absenteeism, and health outcomes between participants and the control group.

A second clinical trial, involving 20 worksites for a large U.S. warehouse retail company did not find improvements in health outcomes, spending, or utilization over a year and a half. The program did boost the share of employees who regularly exercised by 8 percentage points. Workers were eligible for up to $250 dollars in rewards if they participated in a wellness vendor’s programs, including nutrition and exercise classes.

Bottom line: If your employer offers you a wellness program with incentives, don’t ignore it.

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