OBJECTIVE: The purpose of this investigation was to compare the experiences of two U.S. corporations, each employing over 50,000 workers and each offering a comprehensive benefit package, in terms of direct (i.e., medical and pharmaceutical) and indirect (i.e., sick leave and disability) costs of illness. METHODS: Based on a 1996 sample of workers (n=9439), retrospective medical and pharmaceutical claims at the employee level were linked with contemporaneous archival measures of productivity, including sick leave and disability. These results were normalized to the age-gender distribution of the U.S. labor force. To assess the comparability of experiences at each company, direct and indirect burdens of illness were examined both in the aggregate as well as at the disease-group level. RESULTS: The average annual cost of illness per employee was $3,272 in Company A (59% medical, 9% pharmaceutical, and 32% work loss) and $3,574 in Company B (44% medical, 9% pharmaceutical, and 47% work loss). Although musculoskeletal diseases represented the greatest total cost outlay for both companies (i.e., 10% at Company A, 16% at Company B), the distribution of direct and indirect costs varied by diagnostic grouping. CONCLUSIONS: A traditional focus on direct costs alone would vastly understate the impact of illness to the employer, since for every dollar of direct expenditures, these companies spent between $0.47 and $0.87 on additional indirect costs. Worksite and employee health management programs tailored to the characteristics of the particular workforce in question could help maximize return on investment in employee health.