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Employers turn to penalties to drive wellness participation: Study

Employers turn to penalties to drive wellness participation: Study

Employers are taking an ever-harder line with their workforces when it comes to incentivizing engagement in health and wellness management, according to a study published Tuesday by the Midwest Business Group on Health.

The study included 94 employers of various sizes, ranging from less than 200 employees to more than 25,000.

More than 37% of employers polled said they have begun pairing their existing wellness rewards with penalties for nonparticipation, such as increased health care premiums and coverage plan limitations.

Another 6% said they exclusively use such disincentives to drive employee engagement in their wellness programs, and as many as 16% of employers said they plan to incorporate wellness penalties within the next 12 months.

Additionally, more than 28% of employers polled in the Chicago-based MBGH's May survey on wellness incentive structures said they plan to begin tying wellness rewards to their employees' progress in meeting targeted health outcomes, as opposed to mere participation in wellness initiatives. Another 13% of employers said they have already implemented such incentive structures.

“Most employers find that unless they offer some form of incentive, employees and dependents often don't participate in programs that are meant to prevent and reduce chronic disease, resulting in millions of benefits dollars being wasted,” Larry Boress, MBGH president and CEO, said in a statement accompanying the group's report.

MBGH's study underscores an emerging trend within the field of workplace wellness in which employers are gradually shifting wellness resources away from traditional, participation-based reward structures in favor of wellness penalties and outcome-based incentives designed to motivate active and sustained engagement among employees in day-to-day health management.


In 2012, as many as 22% of employers had incorporated some form of penalty into their wellness programs, according to several recent surveys conducted by health care consultants and nonprofit organizations. Additionally, up to 58% of employers surveyed said they plan to add penalties within the next three to five years.

Last year, the Portland, Maine-based MaineHealth hospital system overhauled its employee health benefits and wellness strategy using a tiered coverage structure designed to reward engagement in personal health management.

The hospital system also eliminated its participation-based wellness rewards in favor of incentives tied to specific health goals and outcomes. By the end of 2012, participation in MaineHealth's wellness program increased to 95% compared with 55% in 2011.

Coupled with the migration of nearly one-quarter of its covered employees to a new consumer-driven health plan, MaineHealth's changes to its wellness program are projected to save the hospital system $4.5 million in total health care costs in 2013, even as its total spending on wellness initiatives increased to $2.6 million.

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