Incentives Play Key Role in Wellness Participation

Wellness programs continue to be a popular option for businesses looking to take control of their healthcare premiums, and their success has been driven by wide acceptance from the perspectives of both employer – AND employee. While employer confidence in the impact of wellness continues to grow steadily, a recent study by Guardian Life Insurance found that two-thirds of surveyed employees believe that wellness initiatives can be effective in promoting good health. However, this same study reveals that nearly half of employees who participated in wellness programs admit that their commitment diminishes after just a few years. Thus, it is just as important for employers to maintain worker engagement in wellness programs as it is to get employees to participate in the first place. For businesses looking to do both, research suggests that incentives are the way to go.

The Integrated Benefits Institute (IBI) recently surveyed 500 employers regarding health and productivity in the workplace, and found that 77% of respondents offer wellness programs and 72% used incentives to encourage participation. The types of incentives offered varied somewhat, but the most popular options were discounted services (offered by 63% of respondents) and non-monetary gifts (63%) followed by premium reductions (37%), funds for flexible spending accounts (27%), and reduced copayments (25%). However, the study shows that the most effective incentives were those directly related to the employees’ pocketbooks: premium reductions, reduced copayments and return-to-work full salaries (for injured workers returning to the job). In the Guardian study, 68% of surveyed employees believe that incentives can help them to shore up the willpower to adopt healthier behaviors – but actually measuring that willpower is a little more difficult.

Because there is a limited amount of data concerning the overall affects of wellness programs (many experts believe it takes up to three years to fully assess wellness cost benefits), the actual effectiveness of incentives for these programs is difficult to measure. Even though the measurements depend upon the desired outcomes, most employers gauge the success by return on investment (ROI). In the IBI study, the most common amount spent on wellness incentives was $100-$200 per employee per year (28%), although a significant number of employers (21%) spent up to $400 pepy. If you apply the average wellness ROI of over $3 per every $1 spent (according to the Wellness Councils of America), most of these employers will generate between $300-$600 per employee per year.

However, employers should be weary of pinning the success of their programs on incentives alone. According to some management scholars, if your employees are motivated only by incentives (or disincentives), then you will be forced to expend more and more money on incentives as the years continue, and your ROI will steadily decrease. For a wellness program to truly succeed, the employees must genuinely embrace the concept of worksite wellness. The key is to use incentives as a means to building a healthier mindset among your employees.

For more information, please click on the links below…

Using Incentives to Maximize Participation (WELCOA)

Employer Incentives for Workforce Health and Productivity (IBI)

Guardian Survey Overview (Reuters)

Employers Could Maximize Returns on Their Health and Productivity Programs

Employer Wellness Programs Prod Workers to Adopt Healthy LifestylesIRS Retirement News for Employers


* * * * *

Don't forget to visit the HCW Wellness Corner at www.hcwbenefits.com!

By visiting the HCW Wellness Corner, employers can order various resources to help them initiate, strengthen and/or enhance their wellness initiatives. Best of all, these resources can be sent directly to the employer completely FREE OF CHARGE!

So visit the HCW Wellness Corner today at www.hcwbenefits.com, and let us help you get your company on the road to wellness!

Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.

    March 27, 2009

    Hill, Chesson & Woody strives to keep our clients' group decision makers abreast of trends influencing the employee benefits market. Look for Eyes on Benefits to bring you news and information affecting you and your employees.

    194 Finley Golf Course Road, Suite 200,
    Chapel Hill, NC 27517
    Phone: 919.403.1986
    Fax: 919.869.2063

    www.hcwbenefits.com