Employees Poor Health Cost Employers $575B in 2019

Days with illness-related absences which led to "lost productivity" totaled almost 1.5 billion days annually for all employees, the study found.

Integrated Benefits Institute (IBI) released an analysis Tuesday morning that found employers spent $575 billion on employees' poor health in 2019.

According to the study, for every dollar of the almost $950 billion spent on healthcare benefits, “another $0.61 of productivity is lost to illness and injury."

Days with illness-related absences which led to "lost productivity" totaled almost 1.5 billion days annually for all employees, the study found, and cost employers $3,900 per employee.

IBI used 2019 data of 147 million workers from the U.S. Bureau of Labor Statistics (BLS) and its own Benchmarking Data of 66,000 U.S. employers.

"Employers who primarily focus on the cost of health care expenses and don’t include the cost of lost productivity and the effects on their business outcomes and employee total wellbeing should look closely at these results," Kelly McDevitt, president of IBI, said in a statement. "Designing programs and benefits that more fully support today’s employee needs will be an investment in long term success for their business."

IBI developed a Full Cost Estimator (FCE) to analyze costs for specific industries or an individual company.

"[The FCE] lets us look back to what employers experienced in 2015, see how patterns of absence have changed, and get a better sense to prioritize investments in healthy workers for the post-pandemic economy," Brian Gifford, PhD, director of research and analytics at IBI, said in a statement.

Additionally, the FCE found a 2% increase in lost workdays per employee from 2015 to 2019. However, lost workdays due to workers compensation decreased 44% during those years. Short-term disability increased by 50%, and long-term disability leave increased by 10% between 2015 to 2019.