Employers Increase Wellness Budgets And Use Of Incentives To Participate

Employers are showing an increased commitment to workplace wellness programs, as wellness budgets increase. More employers also are providing increased incentives to participate in the programs. In addition, employees are seeing the benefits of these programs. These are the findings of three recent surveys from Optum, bswift, and Virgin Pulse.

Wellness Budgets Increase

Despite the still struggling economy, wellness budgets have largely remained stable, according to recent research by Optum. In fact, the study found that more than one-fifth of employers reported spending more than last year, and approximately 40 percent anticipate that spending will increase over the next three years.

Eighty-seven percent of employers report that health management programs are important to the benefits mix at their companies. Program penetration also remains stable: on average, small companies offer about five programs, mid-sized firms offer seven, and large companies offer nine.

The survey asked companies how the Patient Protection and Affordable Care Act (ACA) has affected wellness programs. Employers report that due to the ACA, they have increased incentive amounts for tobacco cessation programs (30 percent); extended incentives to spouses (23 percent); and offered higher incentive amounts for programs other than smoking cessation (21 percent).

Incentives On The Rise

Optum found that more than 81 percent of employers offered employees incentives to participate in wellness programs, up from 74 percent two years ago. Employers reported spending an average of $167 per participant per year on incentives, up from $154 one year ago. The most popular incentive is employer contributions to health accounts, according to Optum.

Employers said they are moving away from rewarding workers simply for signing up for, or even completing a wellness program. Forty-three percent of companies are now rewarding for attaining specific health outcomes, such as losing 10 pounds. Additionally, one-third of companies said they would be interested in rewarding for specific outcomes in the future.

Another study from bswift found the similar results: employers are rapidly moving toward providing outcome-based incentives for workers who take part in wellness programs. The fifth-annual benchmarking study found that nearly 25 percent of large employers with wellness programs now provide outcomes-based incentives for employees who meet or exceed biometric thresholds, and almost half are considering this approach for 2015.

The bswift study also found that the percentage of employers who use incentives in their wellness programs are on the rise: 83 percent of large employers and 78 percent of smaller employers. The most common incentive found in the bswift study was health insurance premium discounts.

However, while employers expanded wellness programs and increased incentive amounts in 2013, participation rates decreased, with fewer employers achieving rates above 50 percent. bswift noted that for HR leaders, this “result underscores the challenge of maintaining employee engagement in wellness while faced with rising corporate economic pressures and communication demands created by rapid regulatory changes.”

Employees See Benefits

Employees are seeing the benefits of these workplace wellness programs, reporting an improved company culture and health, and increased energy and productivity in the workplace, according to recent research from Virgin Pulse. The Business of Healthy Employees 2014: A Survey of Workplace Health Priorities found that 87 percent of employees said that wellness programs positively impact company culture and 96 percent are participating in them to improve their own health. In addition, 88 percent of respondents indicated the programs provide a benefit to companies in the recruitment process.

Despite these findings, many employers are struggling to commit to and measure proven strategies that drive employee engagement, productivity, and happiness in wellness programs. Forty-eight percent of employers reported that they do not track increased engagement and 53 percent reported that they do not measure improved productivity. The survey also found that employers are leaving money on the table. Nearly half of the employers surveyed, 43 percent, are not planning to take advantage of incentives offered as part of the ACA.

“We’re in the midst of an engagement crisis. Overall employee disengagement is being reported at 70 percent in the U.S. and even higher globally. That means even on a good day, your employees aren’t tapping their full brainpower or reaching their full productivity potential,” said Chris Boyce, CEO of Virgin Pulse. “Making an investment in employees and demonstrating a commitment to them and their well-being is a straightforward way to help employees make daily changes that lead to sustainable healthy behaviors and improvements in workplace engagement and productivity.”

For more information on the Optum study, visit http://www.optum.com. The bswift survey contains responses from 388 benefits decision-makers at organizations (of 50 or more employees) that offer health benefits. For more information, visit http://www.bswift.com. The Virgin Pulse survey contains responses from 361 organizations and 3,822 employees. For more information, visit http://www.virginpulse.com.

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