Benefits February 11, 2016

Measuring Health Benefit Effectiveness Would Help with Decisions

Only 6% of CFOs reported that their company assesses the return on investment (ROI) of its health benefits, and just 23% make any performance assessment at all.
Reported by

Most chief financial officers are deeply involved in their company’s health benefits decision-making, but are doing so without data to determine whether those benefits are achieving their goals, according to a survey of CFOs conducted by the Integrated Benefits Institute (IBI).

While a solid majority (85%) of CFO respondents reported that they play a role in making decisions about their company’s health benefits, only 6% reported that their company assesses the return on investment (ROI) of its health benefits, and just 23% make any performance assessment at all. The survey found CFOs are not just focused on controlling costs of their health benefits, but also on attracting and retaining talent and helping employees be healthier.

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

In addition, nearly half (43%) of respondents said the finance function of their company participates in health benefits decisions as an equal partner with other functions (such as HR); 15% reported that the finance function makes all or most health benefits decisions. More than half (53%) of CFOs agreed that linking performance to business metrics would help them make better benefits decisions.

Despite a lack of performance data, nearly all CFO respondents reported that their company offers health benefits, such as wellness programs, disability leave and coverage of specialty pharmaceuticals; few reported plans to cut back or eliminate these benefits.

“These results are not surprising. It’s not that companies don’t see the advantage in assessing their programs, it’s that the typical metrics—ROI, for example—don’t necessarily capture what companies are trying to accomplish with their benefits in the first place,” says IBI President Dr. Thomas Parry. “A company’s commitment to health benefits reflects its business strategy and its corporate value system. The value of benefits needs to be assessed in those terms, as well as in dollars.”

The report—Finding the Value in Health—is available here.
Benefits February 11, 2016

Employers Turn to Another Metric for Wellness Programs

Return on investment is just part of the story for measuring the success of a wellness program. 

Reported by

When it comes to measuring wellness program success, employers are using measures that calculate value on investment (VOI) as well as return on investment (ROI), according to a new report from the International Foundation of Employee Benefit Plans (IFEBP).

“A Closer Look: Workplace Wellness Outcomes” finds that just over one-quarter of organizations (28%) are measuring wellness program success with traditional ROI. Half are using at least one VOI measure to track success including employee engagement (30%), turnover (22%), absenteeism (18%), productivity (17%) and recruitment/referral rates (13%).

For more stories like this, sign up for the PLANSPONSOR NEWSDash daily newsletter.

Wellness programs continue to gain traction, with previous research revealing that the vast majority of executives believe well-being programs can prevent workplace burn-out. More than 80% of employees say they participate in workplace well-being programs to reduce their stress levels.   

IFEBP’s report compares organizations achieving positive wellness VOI with the average organization offering wellness initiatives. In general, the report finds organizations with positive wellness VOI offer a wider range of wellness offerings than other organizations. Positive VOI offerings include fitness and nutrition initiatives, screening and treatment programs, social and community events, stress and mental health offerings, and purpose and growth initiatives.

Positive VOI wellness programs are also likelier to use a range of wellness communication channels including seminars, speakers, testimonials, books, brochures, health fairs and social media.

NEXT: A strong VOI and holistic approach go hand in hand

Employers that report a strong VOI take a more holistic approach to wellness, according to Julie Stich, research director at the International Foundation. “Beyond traditional wellness initiatives, they are offering options like stress-management programs, staff outings, charity drives and flexible work hours,” Stich says.

Incentives continue to be popular for increasing participation in wellness initiatives, and the report finds they appear to be successful. Participation is especially boosted by offering incentives for health screenings (57% vs. 40%), weight-loss programs (37% vs. 17%) and health fairs (54% vs. 37%). Other factors that successfully increase participation are targeting programs based on employee health risks, surveying workers for feedback on initiatives, including spouses and children in offerings and having company leaders communicate wellness program support.

As well as boosting participation, three factors—a greater level of wellness communication, a willingness to seek worker input and an effort to include families—are shared themes across organizations with positive ROI, VOI and great workplace cultures.

“Wellness programs are not one size fits all,” Stich says. “Before launching or expanding a wellness initiative, employers should determine what their goals are and what programs are a good fit for their unique workplace culture.”

“A Closer Look: Workplace Wellness Outcomes” breaks down the various types of wellness program designs offered and outcomes experienced by organizations to reveal ideas for success. The report uses data from 372 U.S. organizations of a variety of sizes, industries and regions across the U.S. that participated in the 2015 Workplace Wellness Trends Survey.  

«