Spending On Wellness Incentives Has Doubled In The Last Four Years

Corporate employers plan to spend an average of $521 per employee on wellness-based incentives within corporate health care programs, which marks an increase of 13 percent from the average of $460 reported for 2011, and is double the per employee average of $260 reported in 2009, according to recent research from Fidelity Investments and the National Business Group on Health (NBGH).

In addition to an increase in the average amount employers plan to spend on wellness incentives, the survey found that the overall use of wellness-based incentives among corporate employers continues to increase. The study found that nearly 86 percent of employers currently offer wellness-based incentives, an increase from 73 percent from 2011 and 57 percent from 2009.

While the percent of corporate employers offering wellness-based incentives has increased across all markets, the survey found significant growth in the mid-market, where 77 percent employers plan to offer wellness-based incentives in 2013—more than double the 38 percent of mid-market employers that offered wellness-based incentives in 2010. In addition, almost half of employers in the mid-market (45 percent) plan to offer average incentives of more than $500 per employee.

“As the cost of providing health care continues to increase, employers recognize one of the key ways to manage their company’s costs is to incent their workforce to lead a healthier lifestyle,” said Adam Stavisky, senior vice president of Fidelity’s benefits consulting business. “Employers of all sizes have embraced wellness-based incentives to help control costs, and companies are now looking at ways to design and optimize their programs to maximize their positive impact on health for both the organization and employees.”

Employers tying employee eligibility to completion of risk assessment or biometric testing. The study also showed that 15 percent of employers surveyed are requiring employees to complete some sort of health activity—such as an employer-sponsored biometric screening or health risk assessment (HRA)—in order to determine their eligibility for one or all of the company’s health plans in 2013. The survey results showed that 10 percent of employers will be requiring employees to complete an HRA or risk being defaulted into a less attractive subset of the company’s health plan, while 7 percent of employers indicated failure to complete a biometric screening would result in being defaulted into a less attractive subset of their company’’ health plan. In addition, 3 percent of employers indicated that failure to complete an HRA or biometric screening would result in loss of benefits for 2013.

Companies continue to tailor programs to increase participation, reward behavior. The survey found that an increasing number of employers are actively managing and expanding their wellness programs and offering incentives designed to increase participation and encourage positive behavior. The most popular wellness-based incentives continue to be a decrease in premiums (61 percent), cash or gift cards (55 percent), or an employer-sponsored contribution to a health savings account or similar heath care-based savings vehicle (27 percent).

This year a majority of employers (54 percent) will expand their wellness-based incentives to include dependents, up from 45 percent in 2011. In addition, almost half (49 percent) will now include spouses/dependents in communications about wellness programs. Employers also are tying wellness-based incentives to an increasing number of health-improvement activities. These include popular activities such as smoking cessation programs and discounts for gym memberships, as well as new options such as employer-sponsored fitness challenges (increasing 10 percent in 2013), and discounts for health food options in the company’s cafeteria (increasing 9 percent in 2013). The study also found that 41 percent of employers currently include, or plan to incorporate, outcomes-based metrics as part of their incentive program—this gives both employers and employees a measurable goal that can be used to reward behavior or results in certain health categories, such as lowering cholesterol (30 percent) or blood pressure (29 percent), or reducing waist measurement (11 percent).

“An increasing number of employers understand how wellness programs contribute to a healthy workforce,” said Helen Darling, president and chief executive officer of the NBGH. “And it’s encouraging to see employers take the necessary steps to tailor their wellness programs in a way that will incent and motivate their employees to engage in health-improvement activities and find ways to reward them for their progress.”

For more information, visit http://www.businessgrouphealth.org.

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