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WASHINGTON — The percentage of employers that plan to penalize their employees for not participating in a workplace wellness program is expected to nearly triple by 2016, according to a study by Towers Watson & Co.
Twenty-two percent of U.S. employers polled in Towers Watson's 2013/2014 “Staying@Work Report” said they have already incorporated penalties into their wellness incentive structures, while 36% say they are planning to do so by the end of next year.
By 2016, 61% of employers said they plan to penalize employees who do not participate in wellness programs.
The study's findings were unveiled Wednesday at the National Business Group on Health's 27th National Conference on Health, Productivity and Human Capital in Washington.
“We've seen that there's been a shift from positive rewards to incentives that, at least, seem like a take-away from employees,” Helen Darling, president and CEO of the Washington-based NBGH, said during a presentation. “Penalties, or the loss of something, builds on behavioral economics and the loss-aversion theory that says individuals are going to be more motivated if they think they're going to lose something than if they're going to get a reward.”
Among employers polled that currently include surcharges, premium increases and other forms of penalties in their wellness incentive structures, the vast majority have done so in tandem with positive incentives such as cash rewards, premium discounts and health savings account contributions.
Only 4% of employers polled said they exclusively penalize their workers for not participating in their wellness programs.
Towers Watson's study also analyzed employers' spending habits when it comes to wellness programs.
The average U.S. employer currently spends approximately $440 per employee per year for workplace wellness and health management programs, with the lion's share — an average of $327 per employee — going to financial incentives.
Among the 199 employers participating in the study, annual spending on wellness ranged from as low as $88 per employee to $688 per employee.