What is a Flexible Wellness Wallet?

A survey by Mercer in 2024 found that 78% of chief human resources officers (CHROs) believe employee wellness programs are important to support employee talent retention, yet only 34% of CHROs claim they have effective, comprehensive wellness strategies.

While this gap in CHRO opinion statistics may be noteworthy, even more troubling is the trend pointed out in a Willis Towers Watson report, which states that claim engagement in most traditional insurance plans has declined rapidly, and fewer than 10% of insured employees submit claims at least once a year. Both statistics provide a glaring indication of the disconnect between what employees need, how employers approach employee health benefits, and what's being provided. This disconnect can be solved via a Flexible Wellness Wallet (FWW).

A Flexible Wellness Wallet is an innovative type of employee benefit scheme, giving employers freedom to provide money that employees may use towards various forms of wellness, which may include dental, fertility, fitness, and mental health services. Unlike traditional insurance products designed for and tied to hospitalization, a wellness wallet provides employees with the flexibility to pursue preventive and outpatient care based on their individual health needs.

In this comprehensive blog, we will review the employee Flexible Wellness Wallet, its characteristics, how to implement one, and why it is becoming an essential piece of emerging HR policies designed to promote employees' overall wellness.

What is a Flexible Wellness Wallet?

A Flexible Wellness Wallet (FWW) is an employer-sponsored, employee-centric benefits solution intended to help employers distribute funds towards a variety of health and wellness services. Unlike health insurance plans that focus primarily on the costs associated with hospitalization, a wellness wallet allows employees to use funds to cover routine health services such as:

• Dental: cleanings, braces, preventive care
• Fitness & Wellness: gym memberships, yoga, personal training
• Mental Health: therapist visits, counseling services, stress management programs
• Fertility: IVF, diagnostics, consultations
• Preventative Health: health screenings, diagnostic testing, nutritionist consultations

The core principle of wellness wallets is flexibility. An employee receives a fixed amount based on wellness priority in receipt of services either in a specific network of providers or in any service of their choice. This model allows every single employee's wellness allocation to be unique based on their own health priorities.

How Does a Flexible Wellness Wallet Work?

1. Funding: Employers will set an annual amount for each employee's wellness wallet; the funds might be distributed monthly, quarterly, or yearly. It can be determined by job level, service duration, or specific wellness-related goals.
2. Digital Access and Management: Employees can view their wellness wallet on a digital platform or application. They can view their spending, the services available to them, and authorize payments without a reimbursement process
3. 0% EMI: Platforms like welUp by SaveIN provide a 0% EMI option, allowing the employee to pay for high-ticket health services without ongoing interest associated with these payments. Items like dental implants and fertility procedures become financially digestible.
4. Tax Considerations: In some situations, funds provided to the wellness wallet may be tax-exempt, depending on how the wellness budget and its structure are incorporated into the regulations. This can provide an additional financial incentive for the employer and employee.
5. Real-Time Data Insights: Advanced wellness wallet platforms provide employers with data analytics on spending patterns, enabling CHROs to refine their wellness strategies based on employee usage and emerging health trends.

Why Should CHROs Implement Flexible Wellness Wallets?

1. Addressing Diverse Employee Needs: A singular insurance plan does not meet the diverse health needs of a diverse workforce. A wellness wallet allows employees to direct their healthcare funds where they need them most, whether it be mental health, fitness, fertility expenses, or preventive care.     
2. Improve Employee Retention and Satisfaction: A 2024 Gallup poll showed a 32% increase in employee retention for companies with comprehensive wellness benefits. When a company offers a wellness wallet, it's showing a commitment to employees' full health and subsequently enhancing employee loyalty and morale.
3. Cost Control and Predictability: While insurance premiums are variable and change prices frequently or without notice, a wellness wallet allows for predictable spending, making budgeting easier. Employers can still cap their contribution to the wellness wallet and offer meaningful health benefits with less risk of unexpected expenses.    
4. Encouraging Preventive Health and Minimizing Claims: Preventive care is always more affordable than emergency care. Wellness wallets can help minimize employee lifestyle risks by enabling employees to access routine check-ups, screenings, and wellness programs, while also minimizing the likelihood of incurring expenses for some severe health incidents that could have been easily mitigated, ultimately reducing total healthcare costs.    
5. Data-Driven Strategic Decisions: Wellness wallet providers will provide data on your employees' spending behavior. For instance, if the majority of funds are used for mental health services, HR can consider implementing targeted mental health workshops or programs to meet demand effectively.

welUp offers a comprehensive wellness wallet solution that spans 7,000+ service providers in over 100 cities.

Employees can use their funds for a diverse array of services from dental care and diagnostic tests to fitness programs and mental health support.

Additionally, welUp includes a ₹5 lakh credit limit with 0% EMI, making high-cost treatments accessible without financial stress.

Implementing a Flexible Wellness Wallet: Key Considerations for CHROs

1. Assess Employee Needs:
   Conduct a needs assessment to determine which services are most in demand among employees. This data-driven approach ensures that the wellness wallet is tailored to actual health priorities.
   
   
2. Select the Right Platform:
   Partner with a comprehensive wellness platform that offers access to diverse services, digital access, and EMI options. A user-friendly interface enhances employee engagement.
   
   
3. Define Budget and Structure:
   Establish clear guidelines on fund allocation. Consider tiered plans based on job roles, seniority, or specific health goals.
   
   
4. Promote Awareness and Education:
   Educate employees on the range of services covered, how to access the wallet, and the financial advantages, including EMI options and potential tax benefits.
   
   
5. Monitor and Adjust:
   Regularly review spending patterns and gather employee feedback to refine the wellness wallet structure and address emerging health needs effectively.
   
   

Redefining Employee Wellness Initiatives

The Flexible Wellness Wallet is not just a financial solution; it is a strategic asset that allows employees to take control of their health while alleviating some of the administrative burden on HR teams. For CHROs, this is an opportunity to modernize their wellness programs, reduce overall healthcare costs, and create a culture of proactive health management.

As the field of workplace wellness continues to change, Flexible Wellness Wallets such as welUp represent the future of employee benefits by aligning organizational health strategies with employee health, productivity, and satisfaction.