Obesity is deadly – and pricey for businesses trying to stay competitive in a global marketplace. Encouraging employee weight loss can go a long way to save money.
Employee Weight Loss Key Points:
- Obese and overweight employees cost employers $425.5 billion per year.
- The excess cost of an obese employee is $6,472 compared to normal-weight employees.
- Modest weight loss of just 5% to 15% of body weight can lead to significant cost reduction.
- A well-designed workplace wellness program can more than pay for itself in direct and indirect ROI.
Obesity and its many comorbidities cost employers an estimated $425.5 billion a year. An analysis found that the overall economic excess cost to employers attributable to obesity is $6,472 per employee, Meanwhile, the annual cost per worker considered overweight but not morbidly obese is $1,244 relative to a worker with healthy weight.
But I do have some good news: Studies show that even modest weight loss among employees can yield substantial financial benefits long term. Over time, a workplace wellness program that is successful in helping employees lose even some of their excess weight can yield significant dividends in employee productivity, reduced absenteeism and presenteeism, and lower health care costs for both employees and workers.
The Heavy Toll of Obesity in the Workplace
An overweight workforce costs employers billions, as highlighted in a recent report by GlobalData:
- Medical Costs. Overweight and obese workers incur $424.5 billion in higher medical costs for themselves and their dependents.
- Missed Workdays. Absenteeism due to obesity-related health issues costs businesses $82.3 billion annually.
- Reduced Productivity. Illness and health problems related to obesity lead to $160.3 billion in reduced productivity.
- Higher Disability Costs. The costs associated with disability claims due to obesity-related conditions amount to $31.1 billion.
- Increased Workers’ Compensation. Obese employees generate $5.2 billion in excess higher workers’ compensation costs compared to normal-weight employees.
Employee Weight Loss: Even Small Improvements Are Worthwhile
Even small reductions in body weight can lead to significant improvements in health and substantial cost savings for businesses over time.
Research from the National Institutes of Health (NIH) indicates that losing just 5% to 15% of body weight can significantly reduce the risk of comorbidities associated with obesity, such as diabetes, hypertension, and cardiovascular diseases.
This reduction in health risks translates into fewer health insurance claims, lower insurance premiums for employees, and decreased absenteeism and presenteeism costs, fewer workers compensation insurance claims and for lower dollar amounts (reducing workers comp insurance premiums in future years) and improves employee turnover rates.
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How To Build A Workplace Culture of Wellness
To leverage the benefits of employee wellness, businesses must foster a culture that prioritizes health and supports employees in their wellness efforts.
Here are several strategies to establish and sustain a successful workplace wellness program:
1. Develop Comprehensive Wellness Programs
A successful wellness program should be holistic, addressing various aspects of health, including physical, mental, and emotional well-being.
Programs could include:
- Regular Health Screenings. Provide opportunities for employees to monitor their health status and identify potential issues early.
- Nutritional Support. Offer healthy food options in the workplace, provide access to nutrition counseling or weight loss programs, and replace unhealthy snacks with fruit and cheese platters.
- Physical Activity. Encourage physical activity through fitness challenges, subsidized gym memberships, or on-site exercise facilities. Make activity challenges a group effort to build a culture of wellness and encourage participation.
- Mental Health Resources. Ensure employees have access to mental health support, including stress management workshops, meditation breaks, and counseling services.
2. Offer health savings accounts (HSAs) as an employee benefit
With HSAs and high-deductible health plans (HDHPs), employees are more directly responsible for their healthcare expenses. This encourages them to make cost-effective and health-conscious decisions, such as choosing healthier foods and participating in wellness programs.
Learn More: Health Savings Accounts
3. Leverage Technology for Employee Engagement
Technology can play a big role in promoting and maintaining employee engagement in wellness initiatives. Consider integrating:
- Fitness Apps and Wearables. Encourage employees to track their physical activity and set fitness goals using apps and wearable devices.
- Virtual Wellness Platforms. Provide online resources and programs that employees can access at their convenience, including virtual fitness classes and health education webinars.
- Gamification. Make wellness fun by introducing gamification elements such as challenges, leaderboards, and rewards for participation and achievement.
4. Create a Supportive Environment
The workplace environment should support and reinforce healthy behaviors. This can be achieved by:
- Healthy Workplace Policies. Implement policies that promote health, such as flexible work schedules to allow for exercise, encouraging breaks for physical activity, installing standing desks, and encouraging fitness..
- Leadership Involvement. Encourage leaders to model healthy behaviors and actively participate in wellness initiatives, setting a positive example for the rest of the team.
- Social Support. Foster a culture of peer support where employees can encourage and motivate each other. Post flyers for local 5K races and join the race as a team.
5. Incentivize Healthy Behaviors
Offering incentives can motivate employees to participate in wellness programs and adopt healthier lifestyles. Incentives could include:
- Health Savings Accounts (HSAs). Encourage employees to save for medical expenses by contributing to HSAs, which can also be linked to wellness achievements.
- High-Deductible Health Plans (HDHPs). Pairing HSAs with HDHPs can motivate employees to take more responsibility for their health and make cost-effective healthcare decisions.
- Wellness Rewards. Provide rewards such as gift cards, extra vacation days, or discounts on health insurance premiums for achieving health milestones or participating in wellness activities.
- Offer Health Sharing as an alternative to traditional insurance. Health sharing communities tend to be very wellness focused compared to traditional health plans.
Employee Weight Loss Wellness Program Compliance
As businesses implement wellness programs, it’s crucial to ensure compliance with regulations.
The legal landscape surrounding wellness programs can be complex, particularly in the post-COVID workplace.
Employers must be aware of issues related to privacy, discrimination, and incentives while designing programs that are fair and inclusive.
Understanding Wellness Compliance Laws
It’s important to balance controlling healthcare costs through wellness programs and employees’ rights to medical privacy and non-discrimination.
Key federal regulations applied by agencies like the Equal Employment Opportunity Commission (EEOC) include:
- HIPAA. Protects against discrimination based on health status.
- ADA. Ensures individuals with disabilities are not discriminated against.
- ACA. Impacts wellness programs, particularly regarding incentive limits.
- Title VII of the Civil Rights Act of 1964. Prohibits discrimination based on race, color, religion, sex, or national origin.
- Genetic Information Nondiscrimination Act (GINA). Prevents discrimination based on genetic information.
Basic Compliance Principles
To ensure that wellness programs adhere to federal laws and protect employee rights, employers should follow these core principles:
- Promote Health. Programs must be designed to encourage health improvement or prevent disease, rather than solely to reduce costs.
- Non-Discrimination. Wellness initiatives should be inclusive and not impose different costs or requirements based on employees’ health conditions.
- Program Types. Distinguish clearly between participatory programs and outcome-based programs, as different rules apply to each.
Compliance Guidelines for Incentives
- Incentive Limits.
- There is a 30% cap on the cost of individual health coverage for incentives tied to wellness programs that require medical data.
- For tobacco cessation programs, the incentive cap is higher at 50% of the health plan cost, as long as there is no requirement for medical testing.
- Voluntary Participation.
- Programs must ensure they do not create significant financial burdens or pressures on employees to participate. High incentives or penalties could be seen as coercive.
Handling Personal Health Information (PHI)
- Confidentiality. PHI collected through wellness programs should be accessible only to individuals involved in plan administration and not be used for employment-related decisions.
- Security. Employers need to implement strong safeguards—technical, administrative, and physical—to protect employee health data, ensuring compliance with HIPAA and other privacy laws.
- Use Restrictions. PHI should strictly be used for the administration of the wellness program and must not be disclosed for other purposes.
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Employee Weight Loss: How To Get Started
A great starting place for employers looking to get a handle on healthcare costs is to take a good look at current group health care costs.
Many employers can save significant money by offering high-deductible health plans and implementing health savings accounts as an employee benefit.
Other affordable options for many smaller businesses is to jettison overpriced group health insurance altogether, and instead roll out a qualified small employer health reimbursement arrangement (QSEHRA) program, which allows your employees to purchase their own health insurance and pay for certain out-of-pocket medical expenses with tax-free dollars.
Learn More: Best Health Benefit Strategies for Employers with Fewer Than 50 Employees
In some cases, you can save up to 40 to 50% compared to traditional health insurance premiums by migrating healthier employees without pre-existing conditions to health sharing plans instead.
Our HSA for America Personal Benefits Managers are experts at helping small businesses design quality health plans you can actually afford, that still help you retain the quality talent you need to stay competitive.
Click here to arrange a free consultation with a PBM.
For Further Reading: How To Beat the High Cost of Employee Stress | What is a High Deductible Health Plan? [HDHP FAQ] | Weight Loss Programs: How To Use HSAs and Tax Deductions to Save Money
Hi! I’m Misty Berryman, and I’m one of your Personal Benefits Managers. I like working with HSA for America because we’re creating solutions to healthcare problems. Our focus on money-saving alternatives like HSA plans and health sharing programs, and the variety of health share programs we offer, are what set us apart. Read more about me on my Bio page.
