Benefits Strategy

What Is a Wellness Reimbursement Benefit & 10 Reasons Why Every Employer Should Offer One

Written by Kate

As an employer, you are always looking for ways to benefit your employees. One of the most effective ways to do this is by offering a wellness reimbursement fringe benefit

This type of benefit allows employees to receive reimbursements for their wellness and health-related expenses. It can be an effective way to show your employees that you care about their health and well-being, as well as incentivize them to stay active and healthy. 

Additionally, it can help to reduce overall healthcare costs for the company and have a positive impact on employee morale. In this article, we will discuss what a wellness reimbursement benefit is, as well as 10 reasons why every employer should offer one.

 Read on to learn more about this topic! Click on the sections below to jump right to your specific question.

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What is a Wellness Reimbursement Benefit?

A wellness reimbursement benefit allows employees to receive reimbursements for their wellness and health-related expenses. It is often offered as part of a company’s wellness program, which is a group of activities or initiatives designed to promote health and wellness among employees regardless of age. 

This can include things such as healthy diet and lifestyle habits (some employers offer a lifestyle spending account perk, or lifestyle benefits to help with lifestyle related purchases), as well as preventative health screenings and tests. 

There are many different types of wellness programs. For example, some employers offer a funded health and wellness program that is separate from the health insurance benefits. On the other hand, some companies combine their health insurance benefits with their wellness program. In both cases, a wellness reimbursement benefit is often part of the program. Some insurance companies offer their own wellness reimbursement program as well, such as the Cigna gym reimbursement program, humana wellness program, or Go365 program by Humana.

Wellness reimbursement benefits should not be offered as a substitute for medical coverage. 

A formal health insurance plan should be part of the benefits package that includes medical benefits should also be offered. Wellness reimbursement benefits should be an additional perk offered by an organization that can be accessed by employees looking to take charge of their health and improve their overall wellness.

How Do Wellness Benefits Impact Strategic HR Initiatives?

Wellness benefits can be a powerful tool in an organization’s strategic HR initiatives. In fact, many companies have realized the value that this type of benefit can have in helping to improve employee satisfaction, employee engagement, and retention. 

It also helps individual employees to become more accountable for their own health and helps organizations gain a competitive advantage. 

This is because wellness benefits can help companies to create a healthier workplace environment, which will ultimately lead to improved employee productivity and overall company performance.

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What is typically reimbursable under Wellness Reimbursement Benefits?

If you’re thinking medicare, hospitals and meds, you’re on the wrong page.

We pointed out that wellness reimbursement allowances do not apply to Medicare costs. So, what are the benefits that are eligible for reimbursement through a wellness program? Let’s have a brief look at these items; they comprise of: 

Besides physical well-being, wellness involves much more. Some people may not be worried about their physical condition but they prioritize their mental health. Those individuals may take advantage of reimbursable wellness funds and rather be a participant in a nutrition and wellness intervention, yoga classes, or even a meditation course.

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10 Reasons to Offer a Wellness Reimbursement Program to Employees

There are many benefits associated with offering a wellness reimbursement program. Some of these include: 

1. Improves Employee Morale 

A wellness reimbursement program can help to improve employee morale by showing your employees that you care about their health. 

Additionally, it can help to promote a positive work environment where employees feel they are being supported and encouraged to live healthy lifestyles.

A recent study by Gallup found that only 24% of workers strongly agree wellbeing is cared about by employer

This is a sobering statistic that many employers are feeling the brunt of, hence the importance of implementing a wellness program.

2. Helps to Reduce Healthcare Costs

As the saying goes, prevention is better than cure and a wellness reimbursement is a step in the right direction in lowering those ever increasing healthcare costs. 

This is because if employees are more healthy, they are less likely to get sick and visit the doctor or hospital. This can lead to lower overall healthcare costs for the employer, which can be a significant benefit. 

3. Can improve Employee Productivity and Performance

If your team is burnt out and stressed, chances are you’ve felt the brunt of it. Large spikes in absenteeism, poor performance and resignations are just some of the issues that go along with a lack of employee wellness.

With that said, many companies are realizing the benefits of having a healthy workforce. Studies have shown that more than 70% of employees report that their health has a direct impact on their productivity. 

Therefore, it is important for employers to promote and support healthy habits among their employees. A wellness reimbursement program can help to increase productivity by promoting healthy habits among employees. This can, in turn, positively affect productivity and overall company performance.

It’s an undeniable fact, staff members who are healthy both mentally and physically are your best assets and by investing in a robust wellness program, you’re already one step ahead of the competition.

 4. Strengthening Teamwork Through Social Activities

Your team needs to feel like they’re connected to each other, not simply just another number, getting a monthly paycheck.

A wellness reimbursement can do wonders for fostering camaraderie and keeping spirits high.

Organizing activities such as lunch dates, weekend running events, and exercising in exclusive fitness facilities are great ways to strengthen connections among employees. Interacting in a casual and non-work related setting can help to enhance interpersonal relationships and foster an atmosphere of cooperation. 

This will enable everyone to work together more efficiently and without any disagreements as they all strive to reach the same objectives.

5. Improve Overall Health and Wellbeing

In addition to the above benefits, a wellness reimbursement program can also help improve employee health by offering them access to preventive care, screenings and tests. 

This can be beneficial in many ways such as helping employees prevent serious diseases like cancer or diabetes, which is a real benefit for both the employee and the employer.

It can also educate employees on how to better care for themselves with proper nutrition, exercise and sleep (some companies also offer education stipends so that employees can learn about any topic that interests them).

The benefits are unending! 

6.Increase your Bottom Line

We already discussed how providing health and wellness advantages could result in greater efficiency. 

When a staff member is more passionate about their job, it raises employee fulfillment, which eventually contributes to elevated profits for the business.

By investing in a wellness reimbursement program the ROI will speak volumes and will have you wondering why you hadn’t done it sooner.

 7. Attracts and Retains Quality Employees.

Money isn’t the only factor anymore. Employees are increasingly looking for employers that offer holistic benefits and company perks as a sign of care.

Moreover, healthy employees are more productive and have a lower rate of absenteeism. Therefore, they are more likely to remain working for your company for a longer period of time. 

Additionally, an overwhelmingly large number of employees report that healthcare coverage is a factor in choosing where to work. Therefore, it is important to provide your employees with a range of health-related benefits. A wellness reimbursement benefit can help to attract and retain high-quality employees by providing them with health-related benefits. 

 8.Helps to Prevent Illnesses and Injuries.

I touched on this earlier but it’s a vital point that deserves its own spot on the list.

A wellness reimbursement benefit can also help to prevent illnesses and injuries from occurring among employees. This is often due to the preventative measures taken dependent on the program. 

For example, a wellness reimbursement program can help to prevent illnesses and injuries by encouraging employees to participate in diet and nutritional guidance, health screenings, and stress management programs. This can help to prevent employees from becoming sick, as well as needing to take time off work due to an injury. 

9. Boosts Employee Morale

Reimbursing wellness initiatives for eligible staff members is a wonderful approach to demonstrating gratitude.

If your employees feel valued, with their requirements taken care of, it will increase contentment and eagerness within the groups. Their focus is greater, they are less fatigued, and they feel more partnered with their organization.  

10. Improved Overall Wellness and Better Work Life Balance.

The global pandemic was if anything, a huge eye-opener for employers with the importance of wellness being at the forefront.

Here’s the thing though, in another Gallup poll, even in 2022, worry, anger, and sadness remained elevated, and stress reached a new high — 44% of employees reported experiencing stress every day.

Wellness is more vital now than ever!

Well-being is important for many aspects of life, including productivity and relationships with colleagues. Therefore, it is important that employers take steps to promote overall well-being among their employees. 

Wellness reimbursement benefits can help to change overall well-being by promoting healthy habits, as well as identifying and addressing any potential health issues that may arise.

It’s also important to factor in your employees location. Those who work remotely might need a wellness solution that’s applicable to a remote setting.  Using various apps or a website to help remote staff remain flexible in terms of wellness should be considered.

How to Implement a Wellness Reimbursement Benefit.

An initial wellness reimbursement plan can be created by first creating a wellness committee, which should include representatives from all levels of the company.

The members of this committee should then determine the costing and steps involved in implementing a wellness reimbursement benefit. 

This can be done by drafting a policy statement or documentation that outlines how the program will operate, how many hours employees should be focusing on wellness as well as outlining instructions on how employees will be able to receive reimbursements for wellness related expenses. 

Once the policy statement is drafted, it should then be reviewed by all stakeholders within your organization. It is also important to make sure that you have a clear understanding of what is considered a reimbursable expense under your program.

Are Wellness Reimbursement Benefits Taxable?

The federal government does not grant any special tax exemptions for rewards given to people taking part in wellness programs. Generally, any medical care given by an employer-sponsored wellness program is excluded from an employee’s taxable income, however, incentives given for taking part in the program are treated the same as any other type of employee bonus or prize.

However, employers are required to report some types of rewards. For instance, bonuses given to employees who meet certain performance goals must be reported as taxable income. In addition, the value of any gift cards or other similar awards given to employees must be reported as taxable income.

5 Tips for Implementing a Wellness Reimbursement Program

 When implementing your own wellness reimbursement program, there are several tips that may be helpful to keep in mind:

1. Decide on the Goal of your Program

Whether you want your program to focus on preventive care or improving overall employee health, it is important that you decide on the goal of your program before you implement it. 

This will help you to make decisions about which benefits to offer and how much money to allocate to the program.

2. Consider Offering Incentives for Participating in Wellness Programs 

If you want your employees to participate in wellness programs, you may want to consider offering them an incentive for doing so. 

This could be a simple cash payment or gift card, or it could be something more stylish like a pedometer or fitness tracker. It’s also wise to tailor your wellness program based on the individual needs of your workers and take their personal preferences into account.  

If you’re looking for a one-size-fits all solution, you’re going to have to go back to the drawing board.

3. Provide Easy Access to your Program

While it is important for your employees to understand the benefits of your program, it is also important that they are able to access those benefits easily and quickly. 

No one has the time to jump through hoops, especially during a busy work day (which is why you may also want to offer day care benefits for employees, to make their lives a bit less busy). 

Your wellness program must provide staff with all of the information they need about your program in an easy-to-understand format and make sure that they can schedule any appointments necessary as soon as possible.

4. Implement a Regular Review Process

When implementing a wellness reimbursement program, it can be helpful to have an ongoing review process. 

This could include keeping track of receipts, looking at what items are more popular and in demand. This will allow you to continue to improve your program over time and ensure that it is working for your employees and that your offering is in fact needed. 

Also, you should be open to receive regular feedback from participants in order to proactively make your program better and more in line with their needs and goals.

5. Communicate Clearly and be Specific.

When implementing a wellness reimbursement program, it is important that you clearly communicate the goals of the program and any incentives and expenses involved with employees. 

This will help them understand what they are expected to do, which can help increase participation in the program and make it more effective.


By offering a wellness reimbursement benefit, employers can create a healthier work environment, which will help to create a more active, productive workforce. 

Additionally, employees are less likely to get sick, which can lead to reduced healthcare costs for the employer. 

Plus, by providing your employees with financial assistance to offset some of the cost of these activities, you’re helping them to be more aware of their health and wellness and making it easier for them to take care of themselves. In short, a wellness plan can be a win-win situation for your company and its employees!

If you would like to learn more about fringe benefits, check out this guide on the different types of fringe benefits you can offer. If you are interested in exploring ways to set up a fringe benefit offering at your company, we would love to help you! Feel free to schedule some time with our experienced benefits experts at your convenience.

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