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Poor Health Costs Employers Big Dollars

By Lisa Zamosky

Sick Day

Poor health and its impact on workers’ productivity come at a high cost to employers and our economy. That’s the finding of a new study by the Integrated Benefits Institute (IBI).

According to the report, 6 billion is lost each year due to poor health. As you’ll see in the graphic below, 39% of that total, or 7 billion, is due to lost productivity; 7 billion is lost each year to absenteeism and the cost of employers paying worker’s compensation and disability payments.

In a statement about the study, IBI president Thomas Parry, Ph.D. said there is good reason why everyone in the U.S. is worried about the economy and health care. “…Illness costs this country hundreds of billions of dollars, and this should serve as a wake-up call for both candidates and employers to invest in the health of workers, for the sake of the people and the benefit of U.S. business,” Parry said.

Health Costs

IBI used a combination of its own data on 60,000 U.S. employers along with the most recent information available from the U.S. Bureau of Labor Statistics to calculate these numbers.

Emphasis on Wellness

As I’ve discussed a number of times before on this blog – and will again in the next few weeks as we get closer to open enrollment – wellness programs have a growing role as part of the health benefits package employers offer workers.

Based on an annual survey conducted by the National Business Group on Health, employers believe that the number one cause of high health care costs is poor health habits. Employers are taking aim at high-cost medical conditions, such as obesity and the myriad medical problems that stem from it, which are viewed as major contributors to rising health care costs.

That’s why over the past number of years employers have increasingly offered discounts on health insurance, in the form of lower premiums and deductibles, to employees who actively participate in wellness programs.

Although results of studies are mixed, there is a growing body of evidence to suggest that investment in employees’ wellness can pay off in the long run in the form of a healthier and more productive workforce.

More Wellness on the Horizon

As I discussed in an earlier post about employer health benefits trends for 2013, the National Business Group on Health annual survey found that employers will continue to increase financial incentives for employees to get involved in wellness programs:

  • 48% of those surveyed said they’ll use incentives
  • Employers will award employees an average of 0 for participating in wellness, up by 50% from 2012
  • Dependents will be offered about 5 for choosing wellness
  • Nearly 30% of employers will tie rewards for participating in wellness programs to reaching health-related goals, such as losing weight
  • More than 20% said they’ll charge employees who fail to participate in available wellness programs

How “Well” Will it Work?

Employees will increasingly be required to take responsibility for their health, or pay a higher cost for their benefits.

Is this the accountability we need to get our country’s health in order? Share your thoughts in the comments section below.

Photo: Stockbyte

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