The cost of poor health: $575B and 1.5B days of productivity annually
For every dollar employers spend on health care, they’re spending 61 cents on illness-related absences and reduced productivity.
Health insurance may be an employer’s biggest benefits expense (not including wages, of course), but as the amount being spent on health care rises, the ROI may be adding up to less than employers think.
According to a recent study from the Integrated Benefits Institute (IBI), for every dollar that employers spend on health care benefits, they’re spending 61 cents on illness-related absences, disability and reduced productivity. Employees are missing a collective 978 million in sick days, workers’ comp, disability and family leave, and health-related distractions at work add an additional 540 million in lost workdays.
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“Employers who primarily focus on the cost of health care expenses and don’t include the cost of lost productivity and the effects on their business outcomes and employee total wellbeing should look closely at these results,” said Kelly McDevitt, IBI president. “Designing programs and benefits that more fully support today’s employee needs will be an investment in long term success for their business.”
IBI’s conclusions are based on calculations from its Full Cost Estimator Tool, as well as data from the Bureau of Labor Statistics and IBI’s 2019 Benchmarking Data.
IBI’s research also illuminated some trends not just in how much employers are losing due to employee poor health, but how. Between 2015 and 2019, lost work due to sick leave has increased 12%, while short-term disability has risen 50%. Days lost to workers compensation, however, has declined 44%.
“The steady decline in workers’ compensation lost-time incidents is great,” says Brian Gifford, PhD, director of research and analytics at IBI. “But five years on, the slow trend upwards in short- and long-term disability lost work time—which we might not have given much thought to from one year to the next—is something that employers need to get serious about addressing.”
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