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Employer spending on wellness incentives to rise in 2014: Survey

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Employer spending on wellness incentives to rise in 2014: Survey

Employer spending on wellness incentives will continue to rise in 2014 despite a decrease in the percentage of employers planning to use financial incentives, according to survey results released on Thursday by Fidelity Investments and the National Business Group on Health.

Seventy-four percent of employers polled in the fifth annual “NBGH/Fidelity Investments Benefits Consulting Survey” said they plan to use financial incentives to drive employee engagement in workplace wellness programs in 2014, a drop from 86% of employers that offered incentives in 2013.

However, employers that are offering incentives said they plan to spend an average of $594 per employee on wellness-related rewards, a 15% increase over the average per-employee spend in 2013 and 128% higher than the average per-employee spend in 2009.

A spokesman for Fidelity Investments said the year-to-year decline in the percentage of employers offering financial incentives linked to wellness program initiatives was driven primarily by a 34% increase in the size of the survey's respondent pool from 2013 to 2014.

Spending on wellness incentives for employees' spouses and domestic partners are likely to increase this year as well, with employers planning to spend an average of $530 on incentives per member, compared with $465 per member in 2013.

Additionally, 57% of employers said they plan to expand their wellness incentive strategies over the next three to five years, while 36% said they intend to maintain their current level of incentive spending.

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“Based on the feedback from this year's survey respondents, it's obvious that wellness programs not only play a key role in many corporate health care plans today, but they'll continue to be an integral part of corporate benefit programs in the future,” Helen Darling, president and CEO of the Washington-based National Business Group on Health, said Thursday in a statement.

The NBGH/Fidelity survey examined incentive spending according to specific wellness programs and initiatives, finding that employers paid an average of $280 to employees for participating in smoking cessation programs, $200 for participation in biometric screenings and disease management programs, $150 for participation in physical activity programs and $130 for participation in health risk assessments.

Across all incentive programs, rewards in the form of health insurance premium discounts were the most popular among employers polled, followed by cash or gift cards and contributions to employees' health spending accounts, health reimbursement arrangements or flexible spending accounts.

“Companies are constantly looking for new and creative ways to expand their programs and motivate their workforce, such as extending wellness incentives to spouses and offering incentives through a contribution to a health savings account,” Robert Kennedy, Boston-based health and welfare practice leader at Fidelity, said in the statement. “Increasingly, employers are viewing health improvement even more broadly through the lens of well-being and productivity.”