Wellness Program Incentives On The Rise

Employers will spend an average of $693 per employee on wellness-based incentives in 2015, up from $594 in 2014 and $430 five years ago, according to recent research from Fidelity Investments and the National Business Group on Health (NBGH). However, the survey found that many employees are not taking full advantage of these programs and earning all of their incentives. Fewer than half (47 percent) of employees earned their full incentive amount in 2014, while 26 percent earned a partial amount. Together, this translates into millions of dollars of unclaimed incentives.

“The next challenge for companies is to continue to find ways to increase participation in these programs and encourage employees to earn the full incentive amount available to them, which will contribute to their financial well-being as well as their physical health,” said Robert Kennedy, health and welfare practice leader with Fidelity’s benefits consulting business. “The expanding use of wellness-based incentives demonstrates that employers are committed to health improvement programs and understand how they can contribute to a healthy workforce and reinforce corporate culture.”

Of the 79 percent of employers who offer health improvement programs, larger companies, those with more than 20,000 employees, are spending the most on these programs, where the per-employee average climbed to $878, up from $717 in 2014. The average for companies with between 5,000 and 20,000 workers rose to $661, up from $493 in 2014.

Incentives vs. disincentives. As the design of wellness programs evolves, employers are increasingly using incentives, such as cash, gift cards, reduced health care premiums or a contribution to a health care account, to encourage employees to participate. At the same time, the use of disincentives among employers for not participating in these plans is decreasing, noted Fidelity/NBGH.

The survey found that the three most popular incentive-based health improvement programs for 2015 are biometric screenings (72 percent of employers plan to offer this program), health risk assessments (70 percent), and physical activity programs (54 percent). Among the top three, only 6 percent plan to use disincentives for not taking a health risk assessment, and 5 percent will use disincentives for not getting a biometric screening (down from 11 percent and 12 percent, respectively). No employers plan to use disincentives for not participating in physical activity programs, although 17 percent of employers continue to attach disincentives for not participating in smoking cessation programs.

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

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