Incentive-based wellness programs gain popularity

More employers are adding health-contingent financial incentives to their workplace wellness programs in order to improve employees' health and reduce medical costs, according to new survey data released this week.

More than 45% of 165 U.S. employers polled in October 2014 by the International Foundation of Employee Benefit Plans said they use health-contingent incentives tied to their employees’ group health benefits. Sixty percent offer some manner of health-contingent wellness incentive to their employees. Roughly half of those employers offer financial rewards to employees who complete weight-loss programs, fitness challenges and other health-related activities, according to the foundation's “2015 Workplace Wellness Trends Survey.”

More than half of employers offering health-contingent incentives have elected to reward their employees for measurable improvements in employees' health outcomes, such as achieving or maintaining a healthy weight, reducing their cholesterol or quitting smoking, the survey results said.

Sixteen percent of employers that offer health-contingent incentives use both activity-based and outcomes-based models.

Among employers offering outcomes-based incentives, 54.8% said they've tied the rewards to tobacco cessation programs, while 57.1% said they reward their employees for improvements in their health risk assessment and/or biometric screening results.

The vast majority of employers using outcomes-based rewards in their wellness programs said the more aggressive approach to motivating participation in their workplace wellness program drew a somewhat or very positive reaction from employees, while only 10.7% said their employees' reaction to the incentives was somewhat negative.

A slight majority of employers that do not offer health-contingent incentives of any kind said they had held off due to potential negative impacts on their workforce culture or fears of civil and/or regulatory actions.