Agents say they are now seeing employers requiring employees to accomplish personal health goals to receive the incentives. Lower your cholesterol and reduce your risk for heart disease, for example, and you pay 20 percent of the premium, rather than the regular 30 percent. Fail to do so, and you don't get that reward. The carrot is not working as well as the stick, and the stick is starting to come out in force now, according to Advantage Benefits Group in Grand Rapids.

The emerging trend represents a natural evolution of sorts in employers using wellness to get health care costs under control. Companies are encouraging employees to take better care of their health, which results in reduced medical claims that drive up premiums. Employers that have had some success with wellness now seek to make further progress by adjusting how incentives are rewarded.

It is an evolving process. Over time, employers have learned and are trying to improve how their plan operates. The push comes as employers face another year of higher premiums, according to Mercer. You're going to feel more of the cost if you do not take more of a role in your overall health.

Incentives and disincentives are tools that inspire employees to adopt healthier lifestyles. It is important to note that employers must be aware of HIPAA regulations as they relate to what incentives can and cannot be offered to workers, according to Meritain Health. Incentives may be offered for simple activities such as completing health risk assessments or participation in disease management programs.

As more wellness programs emerge, the question becomes, which approach is most effective at inspiring behavior change; carrot or stick? Rather than molding an entire program to one extreme, understanding a company's demographics is the best way to ensure ROI on a wellness program.

Just as the rewards and punishments offered through a wellness program are adjusted based on the population's demographics, the balance between incentives and disincentives must also be adjusted accordingly. One size does not fit all when developing a wellness plan, and customization is key. Rewarding a job well done is proven to encourage positive behaviors and motivate behavior change.

Likewise, punishing unfavorable behaviors also has an effect on one's actions and can encourage behavior change as well. Much of how employers approach this balance between reward and punishment is decided by the type of behaviors they are trying to address. The more acute the condition or risk factors, typically the more resistant the participant can be to participation in a wellness program.

With this in mind, each tool has its place, and one may prove to be more effective when addressing a specific aspect of wellness. For example, an incentive may be the most practical and efficient way to initially get employees involved, as recent studies have shown that participation in wellness management exceeds 50 percent when tied to just a $25 incentive. In other situations, incentives may be ineffective in motivating behavior change and disincentives may need to be employed.

For example, one behavior that more and more employers are addressing through disincentives is smoking. In addition to smoking cessation programs, many workplaces are taking a more aggressive role in controlling costs. This may include temporarily increasing a smoker's healthcare premiums until they overcome the habit. Having to pay more for your insurance premium is definitely an attention getter, especially if workers learn about the savings by employees who qualify for better rates simply from participation and positive results from a wellness plan.

According to Corporate Wellness Insights, when employers use this "carrot method" of motivating workers to get healthy, it can improve office morale and give workers a deeper sense of job satisfaction. But what happens when employers start punishing employees for failing to meet wellness objectives? As wellness programs become stricter, driven by employer economics, and workers are evaluated on some level by adherence to a company-wide wellness program, there is considerably greater scrutiny of what constitutes appropriate employer conduct.

For example, if an employee is let go or penalized for failing to reach a specific weight threshold, or is unsuccessful at quitting smoking, what rights does the employee have? This is an evolving area that pits company ROI against individual autonomy. How demanding can employers be when it comes to the health of their employees? What happens when the national battle to combat chronic disease and lower health care costs is prioritized over individual employee rights? Is an obese employee dispensable simply because he is obese? Can he – and more important, will he – claim disability (for example: underactive thyroid preventing weight loss is "not his fault")? How public or subject to review can employees' personal medical records become?

If and when employees are discharged or penalized for failing to reach a threshold of "healthy" determined by the company, no doubt lawsuits will abound. Courts and government agencies will be confronting these issues in the coming years as an increasing number of companies invest in workplace wellness.

So, employers must weigh the advantages or disadvantages. Do they carry a bigger stick, or offer a bigger carrot? People are often motivated by either financial loss or financial gain. Getting healthier in the interim is a side benefit of doing the right thing.

Regardless of your decision on incentivizing your employees, remember that at the end of the day you still want your employees to enjoy their job and not seek another place to work because they don't like or trust you anymore. Plus, your business suffers if former workers are bad mouthing you as a company that doesn't respect its most valuable resource—its people. It's tricky, but wellness improves your company culture and health. Just make sure you deliver it with a positive message.