Employee Health and Wellness ROI: Turning Participation Into Business Value

For employers, healthcare is no longer simply a benefits expense. It is a significant and growing financial investment—and in 2026, the pressure to demonstrate value from that investment is intensifying.

Mercer reports that the average cost of employer-sponsored health insurance reached $17,496 per employee in 2025 and projects an additional 6.7% increase in 2026, pushing average cost above $18,500 per employee.

KFF reports a similar financial reality. In 2025, the average annual premium reached $9,325 for single coverage and $26,993 for family coverage. And for organizations that self-fund their health plans, the relationship between employee healthcare utilization and employer cost is particularly direct. KFF reports that 67% of covered workers are now enrolled in self-funded plans, including 80% of covered workers at larger employers.

For CFOs and finance leaders, that raises an important question:

Are employees taking the actions necessary to get the greatest possible value from the health benefits and wellness programs the organization is already paying for?

Because offering a benefit is not the same as getting value from it.

Employees have to use it.

The Financial Case for Employee Health Engagement Has Changed

Years ago, employers could look at wellness programs primarily as an employee benefit or culture initiative.

That is becoming harder to justify.

With healthcare costs rising faster than many other operating expenses, Finance increasingly needs to understand how health and wellness investments contribute to measurable outcomes.

Mercer's research shows that health benefit costs increased 6% per employee in 2025, outpacing both wage growth and inflation. The organization expects an even greater increase in 2026.

Healthcare cost pressure is therefore not theoretical. It is already showing up in employer budgets.

For self-insured employers in particular, this creates an important distinction: The organization isn't simply buying benefits. It's financing healthcare utilization.

That makes employee participation relevant to Finance.

Preventive screenings, wellness initiatives, chronic-condition management, medication adherence and other health-related programs are designed to help employees take actions that support their health.

But those programs cannot produce their intended value if employees don't participate.

The financial conversation therefore needs to move beyond: “What benefits do we offer?”

to: “Are employees taking advantage of the programs we're already funding?”

Low Participation Can Undermine Existing Healthcare Investments

Employers can invest in strong health benefits, preventive-care resources, wellness programs and digital health solutions—and still struggle to get employees to act.

That creates a utilization problem.

An employee may have access to a preventive screening but never schedule it.

A wellness program may be available but attract only a portion of the eligible population.

A chronic-condition management resource may exist, but employees may fail to engage consistently.

A health assessment may be offered, but employees may never complete it.

From a financial perspective, the issue isn't simply that a program went unused.

The organization may also lose an opportunity to encourage an employee to address a health issue earlier, reinforce a healthier behavior or make better use of a resource that has already been funded.

That distinction matters.

Improving ROI doesn't always mean spending less. Sometimes it means getting greater utilization and measurable value from what you're already spending.

Rising Healthcare Costs Make Participation More Important

The urgency is increasing.

Mercer estimates that without cost-reduction actions, employers would have faced health benefit cost increases approaching 9% in 2026.

Meanwhile, employers are dealing with growing expenses associated with prescription drugs, complex conditions, cancer treatment, behavioral healthcare and other high-cost areas.

For Finance, controlling these expenses isn't simply about negotiating premiums or changing plan design.

Organizations also need to consider the employee behaviors that influence utilization over time.

That includes encouraging employees to:

• Complete recommended preventive screenings
• Participate in wellness initiatives
• Engage with chronic-condition programs
• Complete health assessments
• Follow through with appropriate care
• Participate in health education and wellness activities
• Use available health resources before issues become more difficult to manage

The objective isn't to incentivize healthcare spending.

It's to encourage specific, appropriate employee actions that support the goals of programs the employer has already chosen to fund.

Incentives Can Help Close the Gap Between Access and Action

Communication and education matter—but knowing that a benefit exists doesn't necessarily mean an employee will use it.

People postpone actions.

Emails get ignored.

Portals go unopened.

Appointments get pushed back.

Wellness challenges lose momentum.

That's where a carefully designed incentive strategy can play a role.

Instead of simply telling employees what they should do, employers can attach a meaningful reward to a clearly defined action.

For example, an organization might reward employees for:

• Completing an annual preventive visit
• Participating in an eligible screening
• Completing a health assessment
• Reaching a defined wellness-program milestone
• Participating in an approved health education program
• Completing another measurable activity aligned with the organization's health strategy

Research has found that incentives can influence participation.

A RAND study analyzing workplace wellness programs at 407 employers found that employers offering incentives alongside comprehensive wellness offerings had higher participation rates, with the strongest incentive effect found in comprehensive and prevention-focused programs.

Other research examining financial incentives across 39 employers specifically studied incentives attached to actions including annual preventive visits, biometric screenings and screening services for diabetes, heart disease and cancer.

For Finance, however, the important point isn't simply that incentives can increase participation.

It's how the incentive strategy is structured.

The Goal Isn't to Spend More on Rewards

This is one of the most important distinctions for CFOs and financial decision-makers.

An incentive program should not automatically mean adding a large new expense to the benefits budget.

The better question is: Can a controlled amount of incentive spending help employees make better use of healthcare programs and resources we're already paying for?

That changes the financial framework.

Instead of viewing the incentive solely as an additional cost, Finance can evaluate it against the action the organization is trying to produce.

For example:

If the organization wants more employees to complete a specific preventive-health action, Finance can evaluate:

Program cost → incentive spend → eligible population → participation → completed actions → cost per completed action

That is much more useful than simply asking: “How much did we spend on gift cards?”

The reward itself isn't the business outcome. Employee action is.

Stop Measuring Wellness ROI as One Big Number

The traditional wellness ROI conversation often tries to answer one enormous question:

“For every dollar we spend on wellness, how many dollars do we save in healthcare?”

That sounds appealing, but Finance leaders should be cautious about relying on a single universal ROI number.

Research on comprehensive workplace wellness programs has produced mixed results, and program design, population, duration, participation and measurement methodology can significantly affect outcomes. A systematic review of worksite wellness research, for example, found promising results in several areas but also noted important limitations in the quality and rigor of the available evidence.

A better 2026 approach is to measure the economics of individual programs and behaviors.

Finance teams can ask:

• What behavior are we trying to influence?
• How many employees are eligible?
• What is the current participation rate?
• What participation rate are we targeting?
• What is the incentive cost per participant?
• How many additional employees completed the desired action?
• What was the cost per incremental completed action?
• Did participation remain higher over time?
• Are we seeing changes in relevant utilization or outcome measures?
• Which employee populations respond most effectively?
• Which incentives produce the strongest participation for the dollars invested?

This turns an employee incentive initiative into something Finance understands very well: a measurable investment with defined inputs, outputs and performance indicators.

A Simple Framework for Measuring Incentive ROI

Consider a hypothetical example.

An employer has 2,000 eligible employees for a preventive-health initiative.

Without an incentive, 800 employees complete the desired action—a 40% participation rate.

The organization introduces a targeted incentive and participation increases to 1,100 employees—a 55% participation rate.

That's 300 additional completed actions.

Rather than stopping at the overall cost of the campaign, Finance can calculate:

Total incremental incentive and program cost ÷ additional completed actions = cost per incremental action

From there, the organization can evaluate whether that investment is justified based on the specific health action being encouraged and its expected value to the organization and employees.

This is a simplified illustration, not a guarantee of financial return. But it demonstrates a much more disciplined approach to incentive spending.

Define the action. Measure the change. Calculate the cost. Evaluate the outcome. Optimize the next campaign.

That's how incentive programs become financially accountable.

The ROI Conversation Extends Beyond Medical Claims

Healthcare claims matter, but they're not the only economic consequence associated with employee health.

Chronic conditions and health risk factors can also affect attendance and productivity.

CDC research examining chronic diseases and health risks in the U.S. workforce found that absenteeism increased as workers accumulated health risk factors and chronic conditions. The study estimated that each of the examined risk factors or diseases was associated with more than $2 billion in annual absenteeism costs nationally.

That doesn't mean an incentive program will automatically eliminate those costs.

It does mean Finance should think more broadly about the potential business consequences of employee health.

Depending on the program, relevant measures might include:

• Healthcare utilization
• Preventive-care completion
• Program participation
• Absenteeism
• Productivity
• Employee retention
• Disability-related outcomes
• Cost per participant
• Cost per completed action

The right measures depend on the objective. What matters is establishing them before the incentive program begins.

For Self-Insured Employers, Measurement Matters Even More

Self-insured employers have an especially strong reason to pay attention to employee health engagement.

Unlike a fully insured arrangement in which an insurer assumes much of the claims risk in exchange for a premium, self-funded employers generally pay covered healthcare claims directly, subject to the structure of their plan and stop-loss coverage.

That creates a closer relationship between healthcare strategy, utilization and organizational financial performance.

And self-funding is widespread.

According to KFF's 2025 Employer Health Benefits Survey, 67% of covered workers are enrolled in self-funded plans, rising to 80% among covered workers at larger firms.

For these organizations, improving employee participation isn't merely an HR engagement objective.

It can be part of a broader strategy to improve how effectively healthcare dollars are deployed.

Design Incentives Around Actions—Not Giveaways

A financially disciplined incentive strategy begins with the desired behavior, not the reward.

Start with: What action do we need employees to take?

Then determine: What incentive is appropriate to encourage that action?

This keeps the program focused on outcomes rather than giveaways.

A strong program should have:

A defined behavior.
The employee knows exactly what action is being encouraged.

A defined eligible population.
The organization knows who the program is intended to reach.

An appropriate incentive value.
The reward should be meaningful enough to encourage action without creating unnecessary expense.

Timely delivery.
The closer the reward is delivered to the desired behavior, the clearer the connection between action and recognition.

Relevant reward choice.
Different employees value different things. Choice can make the incentive more personally meaningful without requiring the employer to design a different program for every employee.

Reporting.
Finance and program owners need visibility into distribution, participation and program spending.

A measurement plan.
Success criteria should be established before the campaign launches.

That's the difference between simply distributing rewards and operating an incentive strategy.

How GiftCard Partners Helps Organizations Turn Incentive Spend Into Measurable Action

GiftCard Partners works with employers to design and execute reward strategies that connect incentive spending to specific employee actions.

Rather than starting with, “Which gift card should we send?”, the conversation can start with the business objective:

What behavior are you trying to influence?

From there, GiftCard Partners can help organizations think through the reward experience and execution required to support that objective.

Through the Engage2Reward™ Gift Card Ordering Platform and GiftCard Partners' broader incentive capabilities, organizations can support programs with:

• Digital and physical reward delivery
• Choice-based rewards that give employees greater flexibility
• Health-aligned gift card options
• Prepaid reward solutions
• Customized employee communications and reward experiences
• Campaign management
• Reporting and reward tracking
• API capabilities for integrating incentives into existing workflows
• Scalable fulfillment for organizations with distributed employee populations

For Finance teams, the objective is not simply easier reward fulfillment. It's greater control, visibility and accountability around incentive spending.

And for HR, Benefits and Total Rewards teams, it's the ability to create programs designed around the employee actions they're trying to encourage.

From Benefits Expense to Benefits Value

The economics of employee health and wellness have changed considerably since this article was first published.

Healthcare costs are higher.

Employer budgets are under greater scrutiny.

Finance leaders want measurable outcomes.

And organizations—particularly self-insured employers—have strong reasons to make sure employees are engaging with the healthcare resources already available to them.

The opportunity isn't necessarily to add more benefits.

It's to help employees take greater advantage of the benefits and programs the organization has already chosen to fund.

Targeted incentives can be one tool for closing that gap.

When rewards are connected to clearly defined behaviors, delivered appropriately and measured against participation and outcomes, employers can move beyond simply asking:

“How much are we spending?”

and begin asking: “What employee action is that spending producing?”

That is a much stronger foundation for evaluating ROI.

Turn Employee Health Investment Into Measurable Action

If your organization is already investing heavily in employee healthcare, wellness or preventive-health programs but participation isn't where you want it to be, the answer may not be another program.

It may be a better strategy for getting employees to engage with the programs you already have.

Talk with GiftCard Partners about building a targeted incentive strategy designed around the employee actions, participation goals and measurement priorities that matter to your organization.

Sources

Mercer — National Survey of Employer-Sponsored Health Plans
Average employer health benefit cost increased 6.0% in 2025, with a 6.7% increase projected for 2026.

KFF — 2025 Employer Health Benefits Survey
2025 average premiums, employer-sponsored coverage data and self-funding statistics.

RAND / Journal of Occupational and Environmental Medicine — Incentives, Program Configuration, and Employee Uptake of Workplace Wellness Programs
Analysis of 407 employers examining wellness-program configuration, incentives and employee participation.

Journal of Occupational and Environmental Medicine — Boosting Workplace Wellness Programs With Financial Incentives
Study examining incentives attached to preventive visits, biometric screenings and other health actions across 39 employers.

CDC — Absenteeism and Employer Costs Associated With Chronic Diseases and Health Risk Factors in the U.S. Workforce
Research connecting chronic conditions and health risk factors with employer absenteeism costs.

RAND / American Journal of Health Promotion — Systematic Review of the Impact of Worksite Wellness Programs
Review demonstrating why financial outcomes from wellness programs should be evaluated carefully rather than relying on a universal ROI claim.