Lincoln Industries' Wellness Program - National Business Coalition ...

context of a self-insured plan that has steadily reduced claim costs, reaching a low mod rate
and requiring lower reserves than historically. Nearly 72% of the total savings are generated
in health care cost—but other components also produce substantial savings:
• Tobacco use in the employee population is down radically. Yet between new hires and the
expectation that all smokers are encouraged to quit, nine employees successfully used the
smoking cessation program in 2011, yielding a projected $4,800 in savings per participant.
• Other intervention programs generate substantial cost reduction by changing health
behavior, managing chronic diseases, and flu vaccination—very close in total savings to the
absenteeism component.
• Absenteeism savings are calculated in relation to the national average rate of 5%
unplanned absence, estimated by the Society of Human Resource Management. Lincoln
Industries, with a rate of 3%, saves nearly $1,200 per employee at their average hourly cost
of $19.93 in 2011.
• Reduced turnover cost is calculated as 5% of total turnover cost for the year, on the
assumption that wellness reduces turnover by 5%.
The Wellness Program correlates wellness and productivity inside the organization, and
compares its wellness culture to regional and national benchmarks. Measures of wellness and
productivity include: participation in programs (reported at supervisor level), health
outcomes as measured by prevalence of metabolic syndrome, and survey data from the Well-
Being Assessment plus Lincoln Industries’ own internal opinion survey which measures
culture components related to the company’s Beliefs and Drivers. Lincoln Industries’ average
Gallup-Healthways Well-Being Index Composite Score is 74.1, higher than the community
score of 72.8 for Lincoln, Nebraska.
Conclusion
The Lincoln Industries Wellness Program is driven by strong upper-management support for
employee wellness and satisfaction, but also has produced an ROI that can justify wellness
investments in other organizations. The virtues of incremental program development are on
full display in the Lincoln Industries story, where a culture of health has become a key driver
in a successful high-performance manufacturing organization.