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Use of Monetary Incentives to Promote Wellness Grows

By Stephen Miller, CEBS  8/14/2012
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U.S. employers increasingly rely on incentives to drive participation in health programs and to encourage employees and their families to take better care of themselves, according to survey findings from Aon Hewitt.

The HR consultancy's 2012 Health Care Survey of nearly 2,000 U.S. employers (representing over 20 million U.S. employees and their dependents) found that 84 percent offered employees incentives for participating in a health risk questionnaire, and almost two-thirds (64 percent) offered an incentive for participation in biometric screenings.

Participation-Based Incentives

The use of monetary incentives to promote program participation increased dramatically over the past year. In 2012:

59 percent of employers used monetary incentives to promote participation in wellness and health improvement programs, up from 37 percent in 2011.

54 percent of employers used monetary incentives to promote participation in disease/condition management programs, almost triple the 17 percent that did so in 2011.

Outcome-Based Incentives

Moreover, a growing number of employers are linking incentives to a result instead of participation in a program. Of companies that offer incentives or impose consequences in 2012:

58 percent offered some form of incentive for completing lifestyle modification programs, such as quitting smoking or losing weight.

About one-quarter offer incentives for progress or attainment made toward meeting acceptable ranges for biometric measures such as blood pressure, body mass index, blood sugar and cholesterol.

“Incentives solely tied to participation tend to become entitlement programs, with employees expecting to be rewarded without any sense of accountability for better health. To truly impact employee behavior change, more organizations realize they need to closely tie rewards to outcomes and better results,” Jim Winkler, Aon Hewitt's chief innovation officer for health and benefits, told the press.

Despite increased employer interest in tying incentives to results, the survey showed room for improvement. For instance:

More than 80 percent of employers provide an incentive to complete a health questionnaire, yet less than 10 percent provide an incentive to address the results of the questionnaire.

More than 60 percent of employers provide an incentive to complete biometric screening, but less than 10 percent provide an incentive to take any action. 

Companies Increase Wellness Incentive Dollars

Most U.S. companies planned to increase the dollar value of the incentives they offer employees to participate in health improvement programs in 2012, according to an employer survey by Fidelity Investments and the not-for-profit National Business Group on Health fielded Nov. 1-Dec. 30, 2011, among U.S. companies ranging in size from 1,000 to 100,000 employees.

Among the top findings from the survey:

• Almost three out of four companies (73 percent) used incentives to engage employees in health improvement programs.

• The average incentive value was $460. That figure has increased steadily from an average of $430 in 2010 and $260 in 2009.

• Employers used different types of incentives, including cash, gift cards and contributions to health savings accounts.

• Program costs. Incentives aside, employers spent on average $169 per employee on health improvement programs in 2011, up from $154 in 2010 and $108 in 2009.

• Most popular offerings. Smoking cessation and employee assistance programs (EAPs) were the most prevalent lifestyle management offerings in the workplace.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

Related SHRM Articles:

11th Circuit Upholds Wellness Program's Premium IncentiveSHRM Online Benefits Discipline, August 2012

Guidance for Outcomes-Based Wellness Incentives, SHRM Online Benefits Discipline, July 2012

Companies Increase Wellness Incentive Dollars, SHRM Online Benefits Discipline, March 2012

Behavioral Economics Improves Health Decisions, SHRM Online Benefits Discipline, January 2012

Finding Success with Progress-Based Health Incentives, SHRM Online Benefits Discipline, December 2011

Getting Results-Based Wellness Communications Right, SHRM Online Benefits Discipline, November 2011

Related SHRM Videos:

Mindy McGrathPoints-Based Wellness Programs
Awarding incentive points can boost wellness program participation and achieve lasting behavioral change, says Mindy McGrath of Maritz.

Alan MomeyerWellness Incentives
Alan Momeyer, VP of HR for Loews Corp., says the rewards are worth the risk of initially overpaying for wellness incentives.

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SHRM Online Health Care Reform Resource Page

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