What Is Wellness Reimbursement and How to Implement a Successful Wellness Program

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.

What is wellness reimbursement?

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. 

What are the benefits of wellness reimbursements?

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: 

• Wellness reimbursements demonstrate employee care: Only 24% of employees believe their organization strongly cares about their wellbeing—a problem easily remedied with a generous wellness stipend. 
• Wellness reimbursements boost productivity: Employees who are engaged in their wellness are more likely to have the energy to be productive at work. 
• Wellness reimbursements lower healthcare costs: With chronic illnesses on the rise, a well-designed wellness reimbursement program can help your employees maintain a healthy lifestyle and prevent serious health issues down the line.

How to implement a successful wellness reimbursement program

Follow the below steps to roll out a wellness program in your organization: 

1. Set clear goals 

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. 

2. Establish eligibility criteria 

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. 

3. Determine reimbursement amount 

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. 

4. Choose eligible expenses 

What can your employees spend their wellness dollars on? Some options include: 

• Gym memberships 
• Fitness classes, such as yoga, spin, or Pilates 
• Wellness retreats 
• Mental health apps or therapy sessions 
• Nutrition counseling 
• Self-help books to promote a healthy lifestyle 
• Weight loss programs
• Mindfulness and meditation programs 

5. Track and report wellness reimbursements 

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. 

6. Promote your wellness reimbursement program 

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.

3 wellness reimbursement case studies

Let’s explore how some top employers manage wellness reimbursement in their respective companies: 

Adobe 

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: 

• Does the item or service enable me, my immediate family, or my pets to engage in activities that benefit our physical, mental, or financial well-being?
• Would my manager agree that this item supports my well-being?
• Is this item on the “Not Eligible” list?

Autodesk 

Autodesk offers an annual $1,000 wellness reimbursement allowance, which enables employees to pursue physical, emotional, financial, and sustainable wellness activities. These might include: 

• Entertainment tickets, including sporting events, amusement parks, and theaters
• Fitness and sports apparel, equipment, memberships, and passes
• Massages and spa treatments
• Mindfulness, meditation, personal interest, and self-enrichment classes
• Childcare services
• Financial counseling sessions

Mercury 

Mercury, a financial technology company, offers a wellness program that employees can use for expenses, including:

• Vacation and travel 
• Tea and coffee 
• Fitness and fitness equipment
• Attractions and entertainment
• Spa and beauty
• Mental health
• Recreation
• Pet care
• Hobbies
• Nutrition and more 

Launched in January 2023 via the Benepass platform, Mercury’s wellness program has a 92% engagement rate. 

How to overcome common challenges in wellness reimbursement

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: 

Budget constraints 

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. 

Employee participation

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:

• Workshops and seminars 
• FAQ sessions 
• Internal wiki 
• Employee handbook 
• Email explainer series 

Program management 

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. 

Return on investment

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:

• Employee participation rates 
• Reduction in absenteeism 
• Improved retention rates 
• Better employee satisfaction scores 
• Employee brand ratings, such as Glassdoor or Blind scores 

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.

Commit to employee wellness with Benepass

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.