Employee Health and Business Performance: Why Engagement Matters

Employee health is often discussed as a benefits or HR issue. For executive leaders, however, the more important question is what employee health means for the performance of the business.

The connection is increasingly difficult to ignore.

Poor employee health and well-being can show up across an organization through absenteeism, lost productivity, turnover, healthcare utilization, and rising benefit costs. At the same time, employers are spending more than ever on healthcare. In 2025, the average annual premium for employer-sponsored family health coverage reached $26,993, up 6% in a single year and 53% since 2015.[1]

And the pressure is continuing. Employers surveyed by Business Group on Health projected a 9% median healthcare cost increase for 2026 before plan design changes, with costs expected to be approximately 62% higher than 2017 levels.[2]

For business leaders, that changes the conversation.

The question is no longer simply: What health and wellness benefits do we offer?

It is: Are employees actually engaging with those investments in ways that can improve health and contribute to better business outcomes?

The Cost of Employee Health Is Already on the Balance Sheet

Healthcare is one of the largest workforce-related expenses many organizations manage.

According to KFF's 2025 Employer Health Benefits Survey, average employer-sponsored health insurance premiums reached:

• $9,325 annually for single coverage
• $26,993 annually for family coverage
• A 5% year-over-year increase for single coverage
• A 6% year-over-year increase for family coverage[1]

Those increases are happening while organizations are also managing higher labor costs, changing workforce expectations, expensive prescription drugs, chronic conditions, and increased utilization of healthcare services.

Business Group on Health reports that employers are facing some of the steepest healthcare cost increases in years. Its 2026 Employer Health Care Strategy Survey found that employers expect a median healthcare cost trend of 9% in 2026 before plan design changes and 7.6% after those changes.[2]

For C-level leaders, the implication is straightforward: Healthcare cannot be viewed only as an expense to negotiate once a year.

Organizations also need to examine how effectively employees use the programs, resources, and preventive services already being funded.

The Hidden Cost of Low Employee Health Engagement

Consider how many resources an organization may already provide:

• Preventive screenings and annual physicals
• Primary care benefits
• Mental health resources
• Employee assistance programs
• Chronic-condition management
• Wellness initiatives
• Nutrition and weight-management programs
• Health assessments
• Telehealth
• Financial wellness resources
• Smoking cessation programs
• Health navigation tools

The organization may be paying for access to all of them. But access and engagement are two very different things.

A benefit that employees overlook, postpone, or fail to use cannot deliver its full intended value.

That creates an important distinction for leadership teams: The objective isn't simply to offer more benefits. It's to increase the value generated by the benefits you already offer.

Participation becomes the bridge between the investment and the potential outcome.

Employee Well-Being and Productivity Are Connected

Healthcare costs are only part of the financial equation. Employee health and well-being can also affect how consistently people are able to contribute at work.

Gallup's research connects employee well-being with outcomes including productivity, absenteeism, employee retention, healthcare utilization, and quality. Gallup estimates that burnout-related turnover and lost productivity cost organizations worldwide approximately $322 billion annually.[3]

That means employee health should not be isolated from broader conversations about workforce performance.

When employees struggle physically, mentally, financially, or emotionally, the effects can surface as:

• More missed work
• Reduced focus and productivity
• Burnout
• Higher turnover risk
• Lower engagement
• Increased healthcare utilization
• Difficulty sustaining performance

Conversely, helping employees engage with resources that support their health can contribute to a more resilient and productive workforce.

For executives, that is the larger opportunity.

Employee health initiatives should not exist solely because they are good benefits to offer. They should be designed to support the health of the workforce and the health of the organization.

Prevention Matters More as Healthcare Costs Rise

One of the strongest arguments for employee health engagement is also one of the simplest: addressing health needs earlier is generally preferable to waiting until they become more complex.

Business Group on Health's research shows employers are increasingly concerned about costly conditions including cancer, cardiovascular disease, diabetes, obesity, autoimmune conditions, and mental health.

Its 2026 research found that:

• 79% of employers were experiencing increased utilization of obesity treatments
• 74% were seeing an impact from higher cancer prevalence
• 73% were experiencing increased utilization of mental health and substance-use services
• 64% were seeing greater chronic-condition management needs[2]

Against that backdrop, prevention and early engagement become strategically important.

Business Group on Health specifically points to recommended screenings, immunizations, primary care, health navigation, and chronic-condition programs as areas employers and employees can use to address affordability and improve value.[2]

But again, those strategies depend on participation.

A preventive screening only creates an opportunity for earlier intervention when someone completes it.

A chronic-condition management program only helps when eligible employees engage with it.

A navigation benefit only helps employees find appropriate care when they actually use it.

The value of a health benefit ultimately depends on employee action.

Stop Measuring Benefits Only by What You Offer

Executives are increasingly asking business units to demonstrate outcomes from their investments, and employee health programs should be no different.

Traditional benefits conversations often focus on questions such as:

• What programs do we provide?
• How much do they cost?
• How competitive are our benefits?
• What percentage of employees are eligible?

Those questions still matter. But organizations should also be asking:

• Are employees participating?
• Which programs have strong or weak utilization?
• Are employees completing the actions the program was designed to encourage?
• Are preventive resources reaching the populations that need them?
• Where does participation fall off?
• What does participation cost per employee?
• Which initiatives are producing measurable outcomes?
• Are vendors demonstrating value?

This moves the conversation from benefit availability to benefit performance.

Business Group on Health has identified this same shift among employers, noting increased emphasis on vendor accountability and the use of clinical, experience, and financial data to evaluate health and well-being programs.[4]

For leadership teams facing rising healthcare costs, that accountability is increasingly important.

Employee Engagement Is the Missing Link

Organizations can build excellent health programs and communicate them repeatedly, but neither guarantees action.

Employees are busy.

An email about an annual screening competes with dozens of other messages.

A wellness challenge may generate initial interest that fades.

A health assessment can remain unfinished.

A chronic-care program can be available without employees consistently participating.

This is where employee engagement becomes critical.

Organizations need to think beyond simply informing employees that a benefit exists and consider what will motivate the behaviors required to make that benefit effective.

Those behaviors may include:

• Completing an annual physical
• Scheduling a preventive screening
• Receiving a recommended immunization
• Participating in a wellness challenge
• Completing a health assessment
• Attending a benefits education session
• Engaging with a chronic-condition program
• Using a health navigation resource
• Completing a financial wellness course
• Following through with another measurable health action

Each represents something more valuable than awareness: completed action.

From Wellness Programs to Business Strategy

The strongest employee health strategies connect three things:

Investment → Employee Action → Business Outcome

The organization makes an investment in benefits and resources.

Employees take specific actions that allow those resources to work.

The organization measures whether participation is contributing to the outcomes it cares about.

That framework changes employee wellness from a collection of programs into a more disciplined business strategy.

It also helps leadership teams identify a common problem: sometimes the investment already exists, but participation is the missing variable.

Before adding another program or vendor, organizations should consider whether they are getting enough engagement from the resources already available.

Sometimes the greater opportunity is not more benefits. It's more action from the benefits you're already funding.

The Role of Incentives in Employee Health Engagement

Incentives can help close the gap between awareness and action.

Rather than rewarding employees broadly, organizations can connect incentives to clearly defined behaviors that support their health strategy.

For example:

Complete the preventive screening → earn the reward.

Finish the health assessment → earn the reward.

Participate in the wellness program → earn the reward.

Complete the educational activity → earn the reward.

Reach the defined program milestone → earn the reward.

This creates a clear relationship between organizational spending and employee behavior.

The incentive is not the objective. The employee action is the objective. The incentive is simply a tool designed to help encourage that action.

That distinction is particularly important for executive and finance leaders evaluating whether incentive spending contributes to broader organizational goals.

Why Targeted Incentives Can Make the Strategy More Measurable

A general wellness giveaway may generate goodwill, but it can be difficult to connect that spending to a specific outcome.

Targeted incentives create a different framework.

Organizations can define:

1. The action they want
2. Who should complete it
3. When it should be completed
4. What incentive will reinforce it
5. How participation will be measured

That creates a clearer line between program investment and program execution.

Instead of asking: How much did we spend on rewards?

Leadership can ask: What employee actions did that spending help us generate?

That is a much more useful business question.

How GiftCard Partners Helps Organizations Turn Strategy Into Action

Designing an incentive strategy is about more than selecting a reward.

Organizations need to consider the behavior they want to influence, the employee population they need to reach, reward choice, timing, fulfillment, program administration, measurement, and the overall participant experience.

GiftCard Partners helps organizations develop incentive approaches around those business and program objectives.

Through GiftCard Partners and the Engage2Reward™ Gift Card Ordering Platform, organizations can support employee health and engagement initiatives with capabilities including:

• Digital gift card delivery
• A broad selection of reward brands
• The Engage2Reward™ Choice Card, allowing recipients to choose from hundreds of gift card options
• Health-aligned gift card options
• Prepaid reward card options
• Campaign management
• Customized and personalized messaging
• Reporting and program visibility
• API capabilities for organizations integrating rewards into existing systems
• Scalable fulfillment for programs of different sizes and structures

The goal is not simply to distribute gift cards. It is to help organizations build an incentive strategy that connects the right reward to the right action at the right time—while giving program owners greater visibility and control.

The Executive Question: What Are You Getting From the Investment?

Healthcare costs are increasing. Employee well-being affects workforce performance. Employers continue investing significant resources in benefits intended to improve health, support employees, and manage risk.

That makes participation an executive issue.

Leadership teams should know whether employees are actually using the programs the organization is funding—and whether those programs are producing meaningful action.

The most important question may therefore be remarkably simple: What are we getting from the investment we're already making?

If participation is low, the answer isn't necessarily another benefit. It may be a stronger engagement strategy.

By connecting employee health initiatives to measurable behaviors—and using targeted incentives where appropriate—organizations can create a clearer path from benefits investment to employee action and ultimately to business value.

Employee health isn't just about creating a healthier workforce. It's about creating a healthier, more resilient organization.

Talk with GiftCard Partners about building an employee health incentive strategy designed around measurable participation, meaningful employee action, and the business outcomes that matter to your organization.

Sources

1. KFF — 2025 Employer Health Benefits Survey. Average employer-sponsored premiums reached $9,325 for single coverage and $26,993 for family coverage in 2025; family premiums increased 6% year over year and 53% since 2015.
   2025 Employer Health Benefits Survey — KFF
2. Business Group on Health — 2026 Employer Health Care Strategy Survey. Employers projected a median 9% healthcare cost trend for 2026 before plan design changes and 7.6% after changes. The survey also reports employer impacts from obesity treatments, cancer, mental health utilization, and chronic-condition management needs.
   2026 Employer Health Care Strategy Survey — Business Group on Health
3. Gallup — Why Employee Wellbeing Is Required for Sustainable Workplace Productivity. Gallup connects employee well-being with productivity, absenteeism, retention, healthcare use, and quality, and estimates burnout-related turnover and lost productivity cost organizations worldwide $322 billion annually.
   Employee Wellbeing and Sustainable Productivity — Gallup
4. Business Group on Health — Trends to Watch. Employer health strategies increasingly emphasize cost management, measurable program performance, vendor accountability, prevention, primary care, and programs capable of demonstrating tangible outcomes.
   Health and Well-Being Trends — Business Group on Health