Employers plan to use financial incentives for increasing employee participation in wellness programs, according to a study by Fidelity Investments and the National Business Group on Health.
The survey, which is continuing research from a Fidelity and NBGH study conducted in 2009, examined the behaviors and offerings of 147 mid- to large-size companies over multiple industries across the U.S.
In 2010, employers used various types of incentives to encourage participation in wellness programs, including cash and gift card offerings as well as additional health savings account contributions, the study found. Employers also tried more negative tactics, such as reducing employer contributions to health plans if employees did not participate. Employee incentives averaged a total cost of $430 per employee last year, a 65 percent jump from $260 in 2009.
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Of all the companies using incentives in 2010, half also offered them to dependents of employees at an average cost of $420. Twelve percent of companies used negative incentives to encourage participation, and 62 percent of employers offered incentives last year, a rise from 57 percent in 2009.
"Employers know that a healthier workforce is more productive in the long term," says Sunit Patel, senior vice president of Fidelity's benefits consulting business, which commissioned the study with NBGH. "Wellness programs in the past have typically had modest impact because of low participation rates, but our study indicated that incentives are starting to make a real difference in employee interest and engagement."
Most employers surveyed, 56 percent, agreed incentive-based programs are more successful than expected at encouraging employee participation, the study revealed.
When excluding incentives, the largest increase in spending last year, the study found the average employer spent $154 per employee on health improvement programs, a increase from $108 in 2009. Of that $154, condition management programs consumed 41 percent of a cost, which is a drop from 43 percent in 2009. Health-risk management programs, however, increased spending to 20 percent in 2010, up from 15 percent in 2009, while spending on lifestyle management programs stayed nearly level at 29 percent in 2010 and 30 percent in 2009.
"Growing numbers of employers nationwide recognize the importance of having a healthy workforce and its link to improving productivity and reducing rising health care costs," says Helen Darling, president and CEO of NBGH. "We believe strongly that the various wellness initiatives that employers are undertaking will have long-lasting positive results for employers, workers and their families."
According to the survey, wellness programs are also growing in numbers. In fact, 74 percent of employers offered 19 or more health improvement programs in 2010 – and that figure is only expected to grow. Fifty percent of all employers in 2010 offered one new wellness program, and 63 percent of employers plan to follow that lead in 2011.
In 2011, health-risk management programs are expected to grow the most as 39 percent of employers plan to add an offering. Thirty-two percent of employers anticipate adding lifestyle management programs 30 percent plan to add communication and education management programs.
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