Wellness as an Employee Benefit?

Because workers compensation is not thought of as an employee benefit and wellness programs are instituted with health insurance related goals in mind, most employers do not consider the impact that a wellness program can have on their workers compensation premiums.  While a wellness program may not have a noticeable impact on the frequency of claims, a well-executed wellness program can have a significant impact on severity.

Example 1:  A client with 150+ employees was experiencing a high number of workers compensation claims that resulted in lost-time.  Several initiatives were put in place to help reduce the incidents of lost-time.  One of the initiatives was a wellness program.  There is a lag of 12 – 24 months from the time a new program starts until the time the results can be measured in dollars and cents.  However, we can measure percentage changes in the incident rate.  This particular employer experienced a 70% reduction in lost-time claims in one 12-month period.

Example 2:  A large construction firm was having issues with keeping their experience rating below a .90 threshold that was required by a couple of General Contractors for whom they perform a large amount of work.  They already had a wellness program in place for health insurance reasons but were not encouraging participation at a high enough level.  Once the incentives were ramped up and participation increased, the impact has resulted in the employer being able to breathe a little easier due to the impact on the severity of their workers compensation claims.

Wellness programs in relation to workers compensation are a relatively new idea.  As with any new idea, it takes time to measure the impact, but it takes longer with workers compensation due to the method of calculating the experience rating.  Employers should consider instituting wellness programs sooner rather than later so they can begin to experience the benefits sooner rather than later.