Despite the unique financial and operational challenges inherent to the public sector, local governments have enjoyed considerable success in designing and implementing effective employee wellness programs.

But they face a hard time justifying the cost of the programs to critics.

A June report by Chicago Inspector General Joseph Ferguson criticizing the city's employee wellness program for failing to justify its cost to taxpayers highlighted the added difficulty public sector employers often face in sustaining employee health management initiatives.

“While the city spent nearly $10.5 million in taxpayer resources from 2012 to 2014 to improve employee health and reduce health care costs through (the program), the city has not formally assessed the program's impact in either area and, at present has no plans to do so,” Mr. Ferguson said in the report. The city needs to “clarify its expectations for the program by setting specific health status and health care savings targets, as well as a timeline for achieving them.”

Industry experts say securing and maintaining the financial investment needed in the early years of a wellness program typically is the most challenging aspect of implementing an effective health management strategy in the public sector.

“Ultimately, it's the taxpayers' money,” said Sadhna Paralkar, senior vice president and national medical director at The Segal Group Inc. in Orange County, California. “Everything that public sector employers do with that money, they have to be very careful with how they utilize that money and very vigilant about whether it's being well-spent.”

Despite the challenges, studies show local governments are at least keeping pace with private companies in their commitment to wellness programs.

According to a 2014 Kaiser Family Foundation survey, 85% of state and municipal governments offer employees at least one wellness program versus 74% of all entities surveyed.

Similarly, a study this year by Willis North America Inc. indicates that not only are public sector employers “far more likely to have a wellness program in place” than private companies, those programs are typically more mature and more comprehensive than those offered in the private sector.

“Generally, the participation rates for basic wellness initiatives like health risk assessments and biometric screenings are definitely better in the public sector,” said Dr. Ron Leopold, Willis' national practice leader of health outcomes in Atlanta. “We also tend to see stronger endorsement of senior management in the public sector that than we do across the board of public and private employers.”

Experts say one way local governments have implemented effective wellness initiatives is incorporating rewards based on employees' participation and/or completion of certain wellness activities — predominantly health risk assessments and biometric screenings — as well as surcharges for tobacco use and other high-risk health behaviors.

“There's a way to present the financial impacts of a wellness program in a way that they're essentially budget neutral — obviously within the limits of the relevant regulatory boundaries — where you're rewarding employees for the things you want them to be doing, and charging them for things they shouldn't be doing,” said Jeanne Langlois, clinical director and national health and productivity practice leader at Wells Fargo Insurance Services Inc. in Milwaukee. “That usually helps move these projects along at the implementation phase.”

Other practices public sector employers use to make wellness programs more financially palatable include low-cost tie-ins with local farmers markets, outdoor fitness events and other community-based initiatives.

“The program doesn't have to be a money pit,” Ms. Paralkar said. “There are ways to do these programs at a much lower cost.”

Though wide-ranging in design, wellness programs cost employers an average of $693 per employee per year, according to a study released in March by the National Business Group on Health and Fidelity Investments.

Another key public-sector challenge is turnover in leadership, particularly among elected officials whose priorities can vary.

Things “can change in a single election year,” Alison Purkey, a Minneapolis-based population health consultant at Optum Inc., said. “It highlights the importance of having your employee wellness strategy on paper.”

Public sector wellness initiatives also can encounter employee resistance, since public-sector workers historically enjoyed more generous benefits than private-sector counterparts, experts say. Last year, the city council in Cheyenne, Wyoming, voted to abandon the city's employee wellness program due in large part to the perception of financial strain on the municipal workers.