Employers Incentivizing for Health and Wellness

It has always been amazing to me to think that people need to be incentivized to be healthy. Despite all the studies on the effects of an unhealthy lifestyle; the number of preventable diseases prevalent in today’s society; the growing evidence that we are a civilization in physical peril, and people still don’t feel that the investment in themselves is not important or valuable enough. That is unless of course, there is an incentive for them to do so. Worse yet, they blame their poor health and poor choices on other circumstances, some of which they claim to be beyond their control. Get real and take responsibility. What has happened? When did we lose sight that are life, our health, is the most precious thing we have in this life?

We all get one and one shot only. If you don’t take care of yourself, who will? That is just one of the questions a lot of big U.S. corporations are starting to take on themselves. If their employees aren’t motivated enough to invest and take care of themselves (which in turn protects their bottom line), might as well give them a little push. According to a recent survey by the ERISA Industry Committee, the National Association of Manufacturers (NAM), and IncentOne, the number of major US employers using incentives to promote employer-sponsored health and wellness programs rose from 62 percent to 71 percent between 2007 and 2008.  Responses revealed a wide range in the value of incentives offered for a host of programs. For example, incentives for weight management programs ranged in cash prizes from $5 to $500, and incentives for smoking cessation programs ranged from a low of $5 to a high of $600.  The average value of incentives per person per year ranged between $100 and $300, with an overall average of $192 per person per year. But are cash prizes really the trick and do they seem to work the best?

“Trinkets and t-shirts aren’t enough to motivate employees for the long term,” said John Engler, president and CEO of NAM. “Employers are keenly interested in innovative ways to lower costs and enhance productivity. Incentives are proving to be an effective tool to engage employees and keep them interested in these programs.” Employers are continuing to experiment with the types of incentives they offer, sometimes offering different incentives and amounts for different types of programs. “Three out of four major employers are using health and wellness programs in an effort to rein in costs that continue to soar year after year,” says Engler. Results of last year’s survey showed a skew towards offering premium reductions over other types of incentives. Gift cards came out on top in 2008 as the most popular incentives employers offer, with premium discounts and cash incentives following close behind.

The survey, which included 225 major U.S. companies employing 7.6 million employees, delved into employer expectation for ROI for health and wellness programs, finding that 83 percent of those who have measured returns are seeking program returns of better than break even.  The findings — the percentage of employers who have successfully measured ROI for their health and wellness programs almost doubled since last year, but still remains less than 30 percent. Employers are using other measures to evaluate program success, such as completion of health risk assessments and program participation. When it comes to incentives, employers are much more likely to reward program participation and completion than to reward employees for meeting specific program goals, such as smoking cessation or losing weight.

Bottom line: whether you are an employee or an employer, take responsibility and protect your bottom line. Even in a time of economic despair, there’s one guarantee and that is that you have complete control of your health. And that’s one investment that you can never lose, despite what happens on Wall St.