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More Employers Using Wellness Incentives

Among employers offering incentives, the average incentive value was estimated to be just under $200 per person per year in 2008. This question was not asked in 2007.

June 27, 2008
Related Topics: Recognition, Motivating Employees, Health and Wellness, Latest News
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Major U.S. employers’ use of incentives in health and wellness programs is on the rise, growing to 71 percent in 2008 from 62 percent last year, according to a survey.

In addition, more employers are successfully measuring return on investment in their wellness programs, according to the survey by the Washington-based ERISA Industry Committee and National Assn. of Manufacturers in conjunction with IncentOne Inc., an incentive technology provider based Lyndhurst, New Jersey.

Among employers offering incentives, the average incentive value was estimated to be just under $200 per person per year in 2008. This question was not asked in 2007.

Gift cards are the most popular type of incentive, used by 28 percent of employers, compared with just 17 percent last year. In 2007, premium reductions were the most popular incentive, used by 41 percent of employers. This year, the use of premium reductions as incentives dropped to 26 percent.

This finding suggests that there isn’t yet agreement on the most effective type of incentive, researchers said.

Participation is the most common behavior employers are rewarding with incentives. The survey found 48 percent of employers offer incentives for participation in health and wellness programs and 38 percent reward employees for completing a program. By contrast, just 12 percent of employers offer incentives for goal achievement.

Researchers said there were two primary reasons employers may choose to link incentives with program enrollment, participation and completion rather than with goal achievement. First, it’s easier to track and confirm enrollment, participation and completion than whether participants achieved specific program goals, they said.

Second, employers are steering clear of regulatory caps on monetary incentives for health and wellness programs imposed under the Health Insurance Portability and Accountability Act. HIPAA regulations set no limits on incentives for participation, but they limit incentives for programs that require participants to meet a health-related standard.

The survey found that 77 percent of employers currently offer formal health and wellness programs, an increase of 7 percent over 2007. More than half of those currently without programs plan to add them within the next six to 12 months.

Although only 36 percent of the employers responding to the survey have attempted to measure return on investment, there has been a significant increase in the success rates of those that have. Approximately 26 percent of employers that attempted to measure ROI did so successfully, up from just 14 percent in 2007.

The Web-based survey, which is in its second year, included responses from 281 respondents representing 225 different companies. The survey was taken earlier this year.

To obtain a copy of the survey, go to www.incentone.com.

Filed by Joanne Wojcik of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com

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