The Impact of Wellness Premium Incentives on your Benefits Budget

Wellness programs have been shown to not only improve employee lifestyle, but also deliver a healthy return on investment to employers who implement them. The return can be anywhere from $3 to $6 for every dollar invested in the wellness program. The problem some employers face is finding money in their budget to get their wellness program started. After all, the return is not instant, it accrues over time.

In the Affordable Care Act (ACA), one key provision enables employers to offer wellness program participants deeper financial incentives associated with their employee contributions to the cost of health insurance. This means that employees who choose not to participate in your wellness program can now be charged up to an additional 30% of the total health insurance cost. In the case of smoking, the allowable incentive grows to 50%.

Benefit managers are finding that, when managed properly, these incentives can offset the cost of wellness programs so that they become budget neutral. We offer a step-by-step guide to help you create a realistic budget.