Survey Shows Increase in Employee Wellness Programs

The number of U.S. employers using incentives to promote employer-sponsored health and wellness programs rose from 62 percent to 71 percent between 2007 and 2008, according to a recent report. The survey, conducted by the ERISA Industry Committee (ERIC), the National Association of Manufacturers (NAM) and IncentOne Inc., also reflects that employers are offering incentives for a range of healthy behaviors being rewarded.

Titled 'Employee Health & Productivity Management Programs: The Use of Incentives,' the survey looked at 225 major U.S. companies (representing 7.6 million employees) that offer in-house health services including disease management programs, on-site clinics or nurse coaches to work with employees. The report also looked at employer expectation for return on investment for health and wellness programs, and found that 83 percent of those who have measured are seeing program returns of 'better than break-even.'

'The conclusion to be drawn here is that if you're a large employer, you're already providing health programs, but now you have been, or are at an increasing rate providing, incentives,' says Michael Dermer, President and CEO of IncentOne.

Besides an increased usage, responses revealed a wide range in the value of incentives offered for a host of different programs. Those offered in smoking cessation programs ranged from $5 to a $600 and those in weight management programs went from a low of $5 to a high of $500. Some employers gave away as much as $1000 in their programs, though the average value of incentives per person per year ranged between $100 and $300, with an overall average of $192 per person per year.

The use of gift cards in these programs seems to be significantly on the rise, with the study showing their use jumping from 17 percent in 2007 to 28 percent in 2008, going from the fourth-highest reward choice to the number-one spot. Merchandise and cash/bonus awards remained steady, with premium reductions seeing a dramatic 15 percent drop between the two years.

Dermer emphasizes that the use of incentives has also expanded in the types of healthy behaviors they are being used to reward. Companies that a year or two ago were using incentives to motivate workers to fill out a health-risk assessment (HRA), are now often using them to encourage preventative screenings, disease management and other measures, in addition to the HRA, says Dermer. The study reflects this expansion, showing that while 'participation' in a wellness program is the top behavior rewarded with incentives, almost 40 percent of responding companies award incentives for 'completing a program,' and such behaviors as 'maintaining outcomes' and 'achieving goals after program' are strongly represented as well.

According to Dermer, the rise in incentives can be seen as a corrective to the underwhelming response from many employees to wellness programs that many employers began providing their workers a few years ago.

'Back in 2005 and 2006, employers believed that if they built great health programs, people would come,' says Dermer. 'They came back to find that generally speaking, programs without incentives will oftentimes have something like 10 percent participation. There's just more of a realization now that incentives are a critical component to rolling out health programs.'

With employers not only having to pay for workers' regular health care costs, but also for the additional in-house services that are quickly becoming the norm at major companies, incentives are being seen as a way to ensure that employees are making these efforts worthwhile.

'Incentives, unlike other health tools—like building a gym, for example—have a guaranteed return on investment just by their very nature,' says Dermer, citing how quantifiable the savings are for rewarding specific behaviors, ranging from purchasing generic prescription drugs to enrolling in a pre-natal care program. '[Incentives] have a very one-to-one relationship to the money you spend and the result you get.'