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More employers expected to penalize wellness program nonparticipation

More employers expected to penalize wellness program nonparticipation

The percentage of employers using penalties to drive participation in employee wellness initiatives is expected to grow considerably in the next few years, according to Lincolnshire, Ill.-based Aon Hewitt, the human resources consulting arm of Aon P.L.C.

Among the 83% of employers that offer incentives for participation in wellness and health management programs such as health risk questionnaires, biometric screenings and smoking cessation programs, just 5% of employers exclusively use health insurance premium increases and other penalties, while 16% offer a mix of rewards and penalties. Meanwhile, 79% of employers only use rewards — such as premium discounts, cash or gift cards — to incentivize their employees to participate in wellness initiatives, according to Aon Hewitt's forthcoming 2013 Health Care Survey, due out in April.

However, 58% of the nearly 800 employers surveyed said they plan to impose penalties within the next three to five years on employees who “do not take appropriate actions for improving their health,” according to Aon Hewitt's findings.

The percentage of employers tying incentives to specific health management outcomes also is expected to grow, according to Aon Hewitt's study. Approximately 24% of employers offer incentives for progress toward or achievement of healthy blood pressure, body mass index, blood sugar and cholesterol, while more than 66% said they are considering implementing outcomes-based incentives within the next few years.


“Motivating people to participate through the use of incentives is a best practice in the industry and these strategies will continue to be a critical part of employers' health care strategies in the future,” Aon Hewitt's chief innovation officer for health and benefits, Jim Winkler, said in a statement released on Monday.

Wellness incentives — particularly those based on penalizing employees for nonparticipation in certain health management initiatives — drew national attention last week after Woonsocket, R.I.-based CVS Pharmacy Inc. announced it would raise premiums $50 per month for its group health care enrollees who did not voluntarily submit to a health risk assessment and biometric screening by May 1.

Other recent studies also seem to support the notion that employers are assuming a tougher stance on wellness and health management. According to a survey released on March 7 by New York-based Towers Watson & Co., 18% of employers apply premium and/or deductible penalties against employees for not participating in or completing health management programs and activities, and 36% plan to implement penalties in 2014.

Sixteen percent of the 583 employers surveyed said they offer outcomes-based incentives in the form or rewards or penalties, and 47% said they were planning to incorporate such incentive structures in 2014.

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