Many employers recognize that wellness programs can lower health care costs and improve the overall health of their workforce, but midsize firms often struggle to implement effective wellness programs.

Many midsize employers are still looking for the right combination of wellness initiatives and incentives that will drive widespread engagement in health management among their employees, panelists said during a recent Business Insurance webinar, “How to Drive Better Engagement and ROI from Your Employee Wellness Plans.”

“In the old world, employers really had three dimensions that they focused on around health care: plan design, medical care and claims costs,” said Tom Parry, president and CEO of the San Francisco-based Integrated Benefits Institute. “Most employers have realized that's not a sufficient strategy.”

Employers today have broadened the scope of metrics with which to make a business case for a long-term health and wellness management strategy, Mr. Parry said.

“On the front end, it's things like health behaviors and health risks, while on the back end employers are broadening their view to include absence, performance, disability, productivity and other things that ultimately impact the business, and this is where CFOs really pay attention,” Mr. Parry said.

Many benefits executives, while successful in securing an initial investment in wellness planning from their senior leadership, struggle to demonstrate a consistent return on that investment once a program is launched. A recent survey by Willis North America Inc. found that 44% of employers said it is prohibitively difficult to determine their wellness program's specific influence on health care costs vs. other external factors.

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“We focus on health metrics, rather than the dollars,” said Meg Mosher, vice president of human resources at Phoenix-based SmartPractice, a medical supply manufacturer and distributor. “I know that's hard to do sometimes, but we find better results and more acceptance by the employees that way.”

Another critical issue that employers encounter is sustaining meaningful engagement — as opposed to basic participation — in health management among their employees. Premium increases, so-called gated health plans and other penalties for nonengagement in wellness initiatives have shown modest but steady growth among employers during the past several years, and were a key component of Auburn Hills, Mich.-based glass manufacturer Guardian Industries Corp.'s recent reworking of its wellness incentives program.

But for penalty-based incentive structures to be effective, employers must be clear with their workforce that their programs' intentions and goals are ultimately about improving employees' health, not simply saving money on benefit costs, panelists said.

“Our argument has always been that we want them to be healthy because it keeps health care costs down, it keeps you on the job and it keeps you productive, but we also think their families want them to be healthy as well. The trick is that we want them to want themselves to be well,” said Paul Landgraf, Guardian Industries' director of human resource services. “We'll give you the tools and the education you need to do that, and maybe we'll kick you in the pants, but at the end of the day we want you to be responsible and to do the right thing.”

To hear more from the panelists, register here for the free, on-demand webinar.