Wellness reimbursement program
Discover the benefits of implementing a wellness reimbursement program for your employees' health and learn how to create an effective program today.
Wellness reimbursement program: an overview
A wellness reimbursement program is a type of employee benefits program that allows employees to be reimbursed for eligible health and wellness expenses. This program can cover a wide range of expenses, such as gym memberships, wellness classes, exercise equipment, and even meditation apps. In this guide, we will discuss the benefits of implementing a wellness reimbursement program and provide a step-by-step process to help businesses create an effective program.
What is a wellness reimbursement program?
A wellness reimbursement program is a type of employee benefits program that provides employees with financial incentives to engage in healthy behaviors. This program typically reimburses employees for eligible health and wellness expenses, such as gym memberships, fitness classes, wellness coaching, wearable fitness trackers and so much more.
By incentivizing healthy behaviors, businesses can improve the health and well-being of their employees while also reducing healthcare costs. A Glassdoor survey found that 94% of employees want benefits that positively impact their overall well-being. Employers who set up a program like this show that they care for their employees.
Why implement a wellness reimbursement program?
Implementing a wellness reimbursement program can provide many benefits to businesses, including:
- Improved employee overall health and well-being
- Reduced healthcare costs
- Increased employee engagement and productivity
- Improved employee retention and recruitment
- Enhanced corporate image and reputation
Allbrids was looking to support their diverse workforce. With employees who worked remotely, hybrid and onsite, they needed a flexible benefits solution to support the modern workforce. A Lifestyle Spending Account administered by Forma solved the problem of low benefits utilization that a wellness reimbursement program can solve.
“We're committed to creating better things in a better way for the Allbirds flock. A great deal of thought goes into every offering we provide, including the way we name our benefits. It is important for us to create a global process that is inclusive and simple so that all eligible employees can best take advantage of these great benefits. As such, we worked with Forma to create wellness, caregiving, connectivity, and work-from-home programs meaningful for Allbirds. We are proud to customize this program to fit our modern retail workforce. Not only did we see more than 72% engagement with 97% CSAT rating in 2021, but we also saved our ops team significant time in the admin process and associated employee inquiries.”
-Kim Lee, Manager, Total Rewards at Allbirds
Steps to implementing a wellness reimbursement program
1. Define program objectives
Before implementing a wellness reimbursement program, businesses should define their program objectives. This includes identifying the goals of the program, such as improving employee health and reducing healthcare costs. Businesses should also identify the key performance indicators (KPIs) they will use to measure the success of the program. Additionally, it is important to consider the budget for the program and decide which types of wellness activities will be eligible for reimbursement.
Forma recommends surveying your employees to get a good understanding of what your employees are wanting in a wellness program. The definitive guide to benefits spending account gives great insight into how to do this successfully.
2. Set up an administrative process
Once businesses have established their objectives, they should set up an administrative process to manage the program. This includes setting rules around who is eligible for the program and how reimbursements will be handled. Businesses should also decide whether they will offer reimbursements up front or after the activity is completed, as well as if there are any limitations on the amount of reimbursement available.
Things to keep in mind here are if the reimbursements will be administered via payroll deposit, expense software, a traditional third-party administrator (TPA) or a new generation TPA.
Forma recommends a modern TPA (like Forma) to help offer the most flexible package and help put the power of choice in the hands of their employees. In additional to just reimbursements, employees have the option of spending in the Forma store or using the Forma card. This way, the employee doesn’t need to wait for reimbursement.
3. Set program limits
To ensure the program is sustainable, businesses should set program limits and determine the flexible benefits funding strategy. This can include the maximum reimbursement amount per employee, the maximum number of reimbursements per year, or a cap on the total program budget.
Budget doesn’t have to be a barrier to creating a wellness reimbursement program. Many companies reallocate funding, shift funds dedicated to real estate, tap into healthcare and wellness funds or start small and iterate.
4. Identify eligible expenses
Once businesses have defined their program objectives, they should identify the eligible expenses that will be covered by the program. Eligible expenses can vary depending on the business and its employees, but can include gym memberships, fitness classes, wellness coaching, and even massage therapy. The program design can be up to the discretion of the employer. For a list of common wellness reimbursement expenses, see Forma’s Lifestyle Spending Account benchmark report.
5. Determine employee eligibility
Businesses should also determine which employees are eligible for the program. This can include all employees, specific departments, or those who meet certain criteria, such as part-time or full-time status. Businesses should also consider any limitations on eligibility, such as employees who have been with the company for a certain amount of time.
Note: it’s important to find a program that serves internationally if you have an international base of employees.
6. Communicate program details to employees
In order for a wellness reimbursement program to be successful, businesses must ensure their employees have all the necessary information. This includes providing detailed descriptions of the types of activities eligible for reimbursement, as well as how to apply and any deadlines associated with the program. Additionally, businesses should communicate how reimbursements will be paid out and how to submit receipts or other required documentation.
7. Implement and track program
Once the program is in place, businesses should implement and track the program to ensure its success. This can include regularly reviewing program data, such as the number of reimbursements and the total program budget, to ensure the program is meeting its objectives.
8. Monitor progress
Once the program is up and running, it’s important to monitor progress. This includes tracking the number of employees enrolled in the program, as well as how much money has been spent on reimbursements. Additionally, businesses should measure their KPIs and make changes or adjustments if necessary.
By following these steps, businesses can successfully implement a wellness reimbursement program that provides clear benefits for employees.
Implementing a wellness reimbursement program can provide many benefits to businesses and their employees. By defining program objectives, identifying eligible expenses, determining employee eligibility, setting program limits, creating a communication plan, and implementing and tracking the program, businesses can create a successful program that improves employee health and well-being.
For more information about Lifestyle Spending Accounts and discuss these eligible expenses, <span class="text-style-link text-color-blue" fs-mirrorclick-element="trigger" role="button">schedule a consultation</span> with one of our experts. We’d be happy to help you find the perfect Lifestyle Spending Account solution for your unique needs.