Mod 2: Definition of a Health and Wellness Program

Understanding the meaning of a health and wellness program is the first step in effectively creating one. Every year companies spend massive amounts of money on health related issues, that could be avoided. A health and wellness program can help alleviate some of these expenses. Let’s explore together how a health and wellness program could help you, and your company!

What is a Health and Wellness Program?

When your employees are happy and healthy, they cost your company less money in health expenses, and have better lives in general. According to a study done by the National Coalition on Health Care, in 2006, employer insurance premiums increased 7.7 percent, twice the rate of inflation. So what exactly is a health and wellness program? A health and wellness program is a corporate program that is implemented to enhance physical and/or mental health. There are many types of health and wellness programs, and many benefits, depending on the program. They can help reduce health insurance costs, safety incidents, and even absenteeism. According to the National Safety Council, nearly one million workers a day are absent due to stress, costing American companies nearly $300 billion a year in loss of productivity, and the cost of temporary help.


Productivity is the capacity, or ability to produce goods or services. A company thrives on maximizing their productivity. When are employees at their most productive state? Simple, when they are happy, healthy, and engaged. Employees who are stressed out or ill are not going to be as productive as employees who are happy and healthy. Stressed out and unhealthy employees have lower morale, and higher absenteeism. They are prone to more accidents and lack of materials because they have a decreased interest in their positions.  According to a study done by Parry T. Integrated Benefits Institute in 2002, employers paid an average of $18,618 per employee per year for all health costs and lost productivity costs. Over $6,000 of that was due to a loss in productivity due to sick leave.

While absenteeism is a big factor in productivity, it’s also beneficial to have happy employees. Employees, who are happy, work smarter and harder. There are many ways to have a health and wellness plan geared towards keeping employees happy.  Having a stress management work shop could help keep employees happy. Also, financial counseling would help alleviate financial stressors. There has been a direct correlation between exercise and happiness, so an exercise centered wellness plan could help as well! Exercise releases the dopamine in your brain. Dopamine is considered to be the “happy chemical”, it’s a chemical in the brain that promotes pleasure and happiness. Exercise also gives you energy and helps reduce stress.

Cost of Health Care

“Healthier employees” is the most basic goal of a health and wellness program. Having healthier employees means less cost for doctors’ visits, prescription drugs, and hospital visits. Health care benefits are one of the most costly expenses for a company. According to CNN on average, employers last year contributed $10,119 to each employee’s $15,253 family coverage premium. It costs a company more to insure employees who have health issues like diabetes, high blood pressure, and those who smoke. A health and wellness program that aids in lessening preventative conditions can reduce health care costs for both the employee and the company. According to the CDC, a smoker who spends $5 on a pack of cigarettes a day can save $1825 a year by giving up smoking, and many companies provide lower insurance premiums for non-smokers, creating additional savings.

Costs of Absenteeism

Absenteeism is a huge expense for companies today. Absenteeism refers primarily to an unscheduled absence of an employee. An employee’s absence is not just for playing hooky, it can be for justifiable reasons like illness or injuries. Productivity declines when employees are absent from their positions. A healthy employee is less likely to get sick, and thus less likely to call in. When an employee is absent, morale and productivity decrease, and costs increase. An employee who is away from their position is usually replaced with another employee or a temporary employee. If the replacement employee needs to be trained, the productivity is either lessened or comes to a stop. If it’s a current employee who is replacing the absent employee, he/she may gain overtime because of the extra shift. The company may also have to pay PTO to the absent employee.

Case Study

Sandra is an employee of a major grocery chain in Utah that specializes in organic & local products. She has been working at the grocery store for 5 years and enjoys her job. Her job is physically demanding, there is a lot of heavy lifting and walking, in her position. In addition, sometimes the customers are not as pleasant as she would hope. The stress of dealing with difficult customers sometimes is overwhelming for new employees. Sandra has had many offers for employment from other grocery store chains, but she never strays. She likes her job, but she loves the company. The company offers a lot of benefits that she would miss if she switched companies. She was able to quit smoking because of their smoking cessation plan, which in turn helped with her daughter’s asthma problems. She gets a discount to the gym, which she uses to blow of work stress after a long day. The company offers a lot of health related plans that show her they really care about her physical and mental wellbeing. They have even started paying for her evening college courses. Sandra is working to get a degree in management so that she can continue with the company as a manager.