How to Reduce the Cost of Healthcare Benefits with Wellness Programs

Healthcare is a powerful benefit employees demand.

To be sure, offering it provides significant benefits for employers too. It helps organizations find and keep great talent, while simultaneously keeping those workers healthy and productive. 

But the cost of providing employee healthcare is significant. 

The average U.S. healthcare premium paid by employers for a single employee in 2021 was $7,739, and the annual family plan cost $22,221 a year. These are the world's highest per-capita healthcare expenditures — and they’re expected to keep rising by up to 10% year over year.

Add on a potential recession, and it’s no surprise that the majority of HR leaders are feeling pressure from their C-suite to reduce healthcare costs. 

If this is you, don't worry. Here’s how you can pay way less to reap the benefits of offering healthcare.

Improve Wellbeing to Reduce Healthcare Expenses 

HR leaders feeling the budget squeeze are in luck: $3 out of every $4 spent annually on healthcare is to address preventable conditions. That means that with the right strategies in place, HR departments can significantly reduce their organization's healthcare costs.

Wellness programs are an incredibly effective strategy. They help to foster healthy employee habits and lifestyles, which can help reduce the amount of medical care they need. Prevention is always cheaper than cure.

Consider heart disease. This is one of the most expensive health conditions for employers: The price of treating it is expected to reach $1.1 trillion in 2030, double the $555 billion it cost in 2015. 

Heart disease can be prevented with exercise, and the cost of helping employees improve their cardio health pales in comparison to covering medicines and emergency surgeries. Comparatively, covering a SoulCycle membership or hosting a company running club is pennies on the dollar. 

Thousands of companies are already enjoying these bottom-line boons. Three out of four HR leaders in our 2023 Return on Wellbeing Study said their wellness program reduces the cost of providing healthcare benefits. Wellhub clients specifically have seen the healthcare costs of employees drop by as much as 35% in one year when employees who check-in five times per month are compared to less-active users.

Wellbeing Activities to Reduce Employee Healthcare Costs

Individual wellness activities reduce company healthcare costs, and these have a compounding effect — there’s a reason nine out of 10 companies that track their wellbeing spending see a positive ROI! Here are several proven tactics you can use to actively mitigate your company's healthcare costs.

Gym Membership Reimbursement

Gym memberships can be a great way to encourage employees to stay active and maintain good health. This can lead to long-term reductions in healthcare needs: A study of Veterans Affairs healthcare patients found that a health plan-sponsored fitness center membership delivered “significantly lower total health care costs” among those that used the plan. 

And there are two bonuses for employers that can make this tactic even more enticing. First, many gyms offer discounts for group memberships, allowing organizations to get more bang for their buck. Second, the IRS considers gym memberships a tax-deductible fringe benefit.

Nutrition Education Courses

Good nutrition and physical health go hand in hand. An employee’s diet is a major factor in their long-term health — poor diets are linked to conditions like diabetes, obesity, heart disease, and other ailments. Offering nutrition education provides employees with the knowledge they need to make beneficial dietary decisions. This can be in-office programming, or through services like the nutrition coaching service StrongerU. Given that the USDA estimates poor nutrition costs $71 billion per year in medical costs, lost productivity, and the associated losses of premature deaths, eating more carrots can translate into large savings over time.

Mental Wellness Programs

Mental wellness is often overlooked by employers, which is an expensive omission — depression alone costs employers an estimated $44 billion in lost productivity alone every year. Mental wellbeing programs can help employees manage stress and stay focused, reducing feelings of anxiety or depression. Initiatives like remote meditation sessions, yoga studio memberships, and counselor reimbursements can all help employees better manage their mental states. These can, in turn, also reduce the need to treat medical treatments caused by chronic stress (which costs the U.S. 300 billion every year once you factor in the cost of turnover, absenteeism and decreased productivity, as well as its associated medical, legal, and insurance costs).

Wellbeing Challenges

Wellbeing challenges can be a fun way to engage employees in healthy activities and build camaraderie among teammates. These could include activity-based challenges where departments compete for the most number of active minutes in a week (which can be measured by a heart tracker), or walking a certain number of steps. Wellhub’s 15-day, international staff steps challenge, for example, inspired 673 Wellhubers to take 45.4 million steps!  Any activities that promote healthy habits over time can result in lower healthcare costs for the organization.

App Subscriptions

Apps are increasingly popular among employers as a way to encourage employees to engage in healthy activities. These are extremely customizable, as there are services that support many different dimensions of wellbeing. For example, Headspace guides employees through mindfulness exercises, MyFitnessPal provides nutrition and activity tracking, and Calm allows employees to gather their sleep stats. All of this data can help employees identify early risk signs for developing conditions, such as constant sleep interruptions that may be sleep apnea. This empowers them to seek cost-savings preventative treatment.

Slash Your Healthcare Costs By a Third

Each of these activities can help reduce your healthcare spending. Now imagine the impact if you offered employees a holistic program, with access to gyms like SoulCycle, LifeTime, and Orange Theory, apps like SleepCycle to track their rest, nutrition education resources like MyFitnessPal, Lifesum, and Stronger U, and guided meditation classes in apps such as Calm and Headspace.

You can offer all that — and more — with Wellhub. Our international network of 50,000 fitness providers and access to dozens of wellness apps are all available in a flexible monthly subscription. 

Treating whole person wellness is why active Wellhub users drive down healthcare expenses by up to 35%. Employees consistently using our platform seek less medical attention and are hospitalized at lower rates than their co-workers, meaning they experience a higher quality of life while incurring fewer healthcare expenses.

Even one monthly fitness check-in makes a difference: Employees who use Wellhub at least once a month decrease their total healthcare costs by 5%, compared to their peers who do not use Wellhub at all. And since Wellhub users pay up to 50% less than traditional membership, they’re saving money too. It’s a win-win.

Speak with a Wellbeing Specialist today for help reducing your healthcare costs!

References 

• Buchholz, K. (2023, February 9). Charted: The countries with the most expensive healthcare. https://www.weforum.org/agenda/2023/02/charted-countries-most-expensive-healthcare-spending/ 
• Cho, S. (2022, February 3). The Cost of Cardiovascular Diseases for Employers. https://www.letsgetchecked.com/articles/the-cost-of-cardiovascular-diseases-for-employers/ 
• Claxton, G., Rae, M., Young, G., & Kurani, N. (2021, November 10). Employer Health Benefits: 2021 Annual Survey. KFF. https://www.kff.org/health-costs/report/2021-employer-health-benefits-survey/ 
• Frazão, E. (n.d.). High Costs Of Poor Eating Patterns In the United States. https://www.ers.usda.gov/webdocs/publications/42215/5830_aib750a_1_.pdf?v=0
• Wellhub. (2023, May 18). Return on Wellbeing Report 2023. /en-us/resources/research/return-on-wellbeing-study-2023
• Insightlink 4cs blog: Reasons why employers should keep track of Employee Health Data. Insightlink. (2023, March 2). https://www.insightlink.com/blog/employee-health-data.cfm
• Jones, M. (n.d.). How Mental Health Can Save Businesses $225 Billion Each Year. Inc. https://www.inc.com/matthew-jones/how-mental-health-can-save-businesses-225-billion-each-year.html
• Mohney, G. (2018, January 15). Stress Costs U.S. $300 Billion Every Year. Healthline. https://www.healthline.com/health-news/stress-health-costs
• Shryock, T. (2022, October 19). Global health care costs expected to increase 10% next year. https://www.medicaleconomics.com/view/global-health-care-costs-expected-to-increase-10-next-year