• Wellness Workdays

The Ins and Outs of Financing Your Employee Wellness Program

Updated: Jul 21, 2021


Employees that embrace wellness are healthier, have improved morale, and are more productive and engaged at work. As organizations strive to integrate wellness into their workplaces, one of the most common concerns is budget.

Budget is a difficult barrier when it comes to wellness. No one wants to feel that they are compromising the well-being of their employees due to costs. In this article, we tackle the difficult questions around how much it makes sense to allocate for wellness, as well as provide some creative insights into how you might offset some or all of your wellness costs.

Why wellness?

Have you ever walked into a restaurant and asked for “food” when the waiter approaches your table? Of course not! Similarly, telling your wellness partner you want “wellness” can be just a little too broad to help set up a budget and a plan. Instead, begin by setting specific goals for how you would like your wellness program to impact your organization and employees.

A useful framework to help you get started is to consider three different levels of wellness offerings depending on your organization’s needs and budget: The “feel-good” model tends to be fun-focused, with the goal of getting employees excited about wellness and making a positive impact on company culture and morale. The “traditional wellness” model is more strategic and comprehensive with a stronger focus on improving health. Finally, "results-driven wellness” programs are the most intensive, with goals of objectively reducing health risks and driving down healthcare costs.

The type of program you choose will relate directly to your budget as well as the outcomes you can expect.

Source: Larry Chapman


Budget Basics: How much does a wellness program cost?

According to WELCOA, The Wellness Council of America, organizations should budget between $15-$750 per person, per year. This range is obviously very wide, but it reflects the wide range of outcomes you can expect to derive from your program depending on the choices you make. As mentioned above, a “feel-good” program is more about low-cost, fun solutions, whereas the intensive data collection and evaluation needed in the “results-driven” approach require more resources. There are many factors that determine your wellness costs. Some of these key factors include:

  • Technology: Costs depend on the types of technology you choose and how you use them. Examples of wellness technology include an online wellness portal, fitness trackers, or electronic medical records. See our Best Practice Brief on what to look for when choosing technology.

  • Employee incentives: The cost of your wellness incentives depends not only on your organization’s budget, but also on the incentive structure you choose (for example, you may choose a fixed-cost raffle vs. a universal incentive). Studies have shown that cash incentives tend to increase the likelihood of individuals participating in the program and improving their health short term; however, internal motivation is needed to maintain these changes in the long term.

  • Third-party vendors: Depending on your in-house resources, you may need third-party vendors such as a wellness company, marketing professionals for communications, graphic designers for branding, or health coaches. An important consideration to highlight in a program dealing with individual health is the HIPAA/information security. Hiring an outside vendor partner can provide instant credibility and trust with your employees. Because of the separation from their employer, they may feel their privacy is better protected.

  • Personnel/staffing needs: As with any new initiative, you must consider what your internal team looks like. Do you have a group in place that has the capacity and enthusiasm to start up your program? Or is an additional hire necessary? Adding tasks to an overstretched plate is not a recipe for a sustainable program. Bringing in a wellness partner who can provide customized materials and best practices will go a long way in preserving your internal resources while maximizing growth and impact of your program.

  • Infrastructure changes: Are there opportunities to make your workplace more conducive to wellness? Are there stations to fill water bottles? Are there healthy options available in the cafeteria? Do employees have what they need to stay well at work (safe stairwells, clean water, fresh air, appropriate breaks, standing/sitting desks, etc.)? Sometimes even small investments in your work environment can make a big impact on employee wellness.

So can we now answer the question “How much does a wellness program cost?” Just as there is no perfect wellness program, there are too many variables to determine a typical or “best” cost! The cost of your program will depend on your technology, incentives, vendors, and, most importantly, on the goals you set.

Finding the Funding: Creative sources to defray program costs Wellness programs cost money, but that doesn’t mean that your budget can’t be shifted to meet the wellness needs of your employees. Buy-in from senior management is vital to ensuring funding is available to start and sustain a successful wellness program. When employers see that their workforce is more engaged and happier with their work environment, they will be more likely to continue to finance wellness initiatives at their organization. In addition to leadership support, here are some options to consider to fund your future (or growing) wellness program:

  • Internal funding: using current funding towards the opportunity for future savings in employee retention, talent recruitment, or healthcare costs

  • Insurance premium increases: increasing employee contribution to insurance premiums. Those who do not participate in wellness pay a higher fee, which goes towards funding the program.

  • Insurance provider contributions: some insurers may provide wellness dollars to be used for an outside wellness outside vendor

  • Healthcare provider contributions: similarly, some healthcare providers may give you a wellness budget (because more health-conscious employees tend to visit the doctor more often)

  • High-deductible health plan: the higher deductible can be used in part to fund wellness services

Wellness Workdays can work with your organization to implement a wellness program that works for your organization and budget. Contact us to learn more.


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