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No one needs a luxury corporate gym membership to stay fit and healthy. But, maintaining wellness can certainly be expensive. Whether you need to fork out for a new pair of sneakers, yoga class fees, or a therapist, these costs can quickly add up. And if your employees can’t afford them, they may feel less balanced and productive at work.
This guide explores how wellness reimbursements work and why you should offer them. We’ll explore how to set up your own wellness program and look at some real-life company examples.
A wellness reimbursement program encourages employees to access a wide range of wellness perks, such as gym memberships, fitness classes, nutrition counseling, mindfulness programs, and more.
This type of program provides employees with a set amount of money to spend on wellness activities or reimburses them for expenses related to maintaining their health and well-being.
Wellness reimbursements sound like something the employee benefits from. And they certainly do. But by holistically supporting your workforce this also creates tangible gains for the overall business, too. Here are some of the main advantages for employers and employees alike:
Follow the below steps to roll out a wellness program in your organization:
Begin by defining your North Star. Why do you want to introduce a wellness program? You might use the SMART framework to select specific, measurable, achievable, relevant, and time-bound goals.
Example: We want our wellness reimbursement program to reduce employee absenteeism by X% over the next six months, measured by individual, team, and organizational absentee rates.
Determine who is eligible to participate in your wellness program. Will you offer it to both full and part-time employees, remote and on-site workers, etc.? The key is to be inclusive and equitable.
There’s no perfect wellness reimbursement sum to offer your employees each month or year. Benepass customers choose a range of values for this benefit, with some organizations offering as little as $40 per person/year up to a top-end amount of $2,400 per person/year. The median is $600.
In contrast, generosity is directly linked to company size, but perhaps not as you might imagine. Smaller companies allocate an average of $900 per person/year toward fitness and wellness, compared to medium-sized businesses offering $500 per year, with larger companies offering $268.
What can your employees spend their wellness dollars on? Some options include:
Accurate record-keeping and reporting are essential for a successful wellness program. A digital benefits platform like Benepass simplifies this process by tracking expenses, managing reimbursements, and providing analytics on your program participation rates.
Of course, you can only achieve the goals you set in step one if your employees actively participate in your program. Strong communication is key here, so your workers understand what is available, the process involved in making wellness purchases, and receiving reimbursements.
Let’s explore how some top employers manage wellness reimbursement in their respective companies:
Adobe employees receive a wellness reimbursement worth up to $600 in 2024. This amount will be converted based on an employee’s local currency. The company does allow part-time employees to reimburse their wellness expenses but has a minimum hour threshold for eligibility. Expenses incurred by spouses, domestic partners, and children are also eligible.
Adobe encourages its workers to ask several questions before they submit a claim, such as:
Autodesk offers an annual $1,000 wellness reimbursement allowance, which enables employees to pursue physical, emotional, financial, and sustainable wellness activities. These might include:
Mercury, a financial technology company, offers a wellness program that employees can use for expenses, including:
Launched in January 2023 via the Benepass platform, Mercury’s wellness program has a 92% engagement rate.
Companies offering wellness reimbursements have their heart in the right place—they want to support their employees with their mental, physical, and emotional wellness. But they may come up against some common roadblocks when rolling out their program:
No company can offer all the employee benefits. And if you’re already stretched providing health insurance and retirement contributions, you may not feel able to afford a wellness fund too.
If you’re on a tight budget, survey your employees to learn what they need most from you. One option to explore is a Lifestyle Spending Account, which gives employees more variety in their benefits.
With this model, employers fund an LSA with a set monthly allowance, and employees can spend it on a variety of eligible spending categories. So, while some may wish to spend their budget on wellness, others may prefer to allocate theirs toward childcare or professional development.
It can be enormously frustrating to design an attractive wellness package, roll it out, and then…crickets. If your employees aren’t engaging in your program, typically, one of two things is happening. Either your employees aren’t interested in the program, or they don’t know about it.
Surveying your employees to learn more about their wants and needs will fix the first problem. The second requires effective communication so everyone knows what is available to them. Consider using the following internal communication methods to fully explain your program:
Wellness reimbursements require paperwork from both employers and employees. Workers must first front the cost of their wellness purchases, for example, paying for a gym membership, then file an expense form to request reimbursement. This is time-consuming for the employee and can also impact their monthly budget.
Internally, the reimbursement model creates a heap of paperwork. Your benefits administration team must process the paperwork, verify the eligibility of each claim, and then reimburse the employee. As an alternative, health and wellness stipends radically reduce the paperwork involved by providing workers with an upfront monthly or annual allowance to use at their discretion.
Any organizational initiative must be justified by the positive gains it provides the overall business. This return on investment relates to the goals you set for your wellness program, but it’s essential you select the right metrics to understand whether you’re achieving better retention rates, improving your employer brand, and achieving a happier workforce. Some useful metrics might include:
Remember: Companies may not see immediate financial gains from their wellness programs, but the long-term benefits can greatly impact your company’s overall success.
Benepass provides a flexible people-first benefits administration program to support your employees’ health and wellbeing. According to the Benepass Benchmarking Guide, 30% of customers offer some type of fitness and wellness program.
Alongside our Lifestyle Spending Account which can include wellness expenses, we also offer a wellness benefits program. This is essentially a wellness stipend employers can give their employees to support their physical, mental, and financial wellness.
Ready to support your employees with a flexible wellness program they can customize to their needs? Book a free Benepass demo today or contact sales@getbenepass.com to connect with a benefits specialist.
