If your employer was ready to hand you an extra $700, wouldn’t you just grab it? In the case of wellness incentives (complete a biometric screening, get a gift card, for example), employees are leaving cash on the table worth millions, according to a recent survey by Fidelity Investments and the National Business Group on Health.
Employers indicated they will spend an average of $693 per employee on wellness-based incentives in 2015, up from $260 in 2009. Yet fewer than half (47%) of employees earned their full incentive amount in 2014. A quarter earned a partial amount. Together, this translates into millions of dollars of unclaimed incentives, Fidelity says.
Already four out of five large employers offer wellness programs such as disease management and health assessments, and one half offer employees financial incentives to participate, according to an EBRI report, “Financial Incentives and Workplace Wellness-Program Participation”. That’s likely to grow, in part because the Affordable Care Act allows employers to provide financial incentives of up to 30%, up from 20% of the total cost of coverage when tied to a wellness program.
Half of employees aren't taking full advantage of financial incentives to participate in workplace... [+]
Also, the Equal Employment Opportunity Commission, which last year filed legal challenges to several wellness programs, claiming they violate the American With Disabilities Act, is poised to release proposed regulations. (The EEOC sent notice of a proposed rulemaking to the OMB on March 20). One of the issues is whether the programs are “voluntary” when employers reward employees for participating, and sometimes penalize employees who don’t participate.
Employers see wellness programs as a way to help manage health care costs and improve worker productivity. Financial incentives are a way to encourage employees to participate. Incentives include discounted health insurance premiums, lower deductibles and co-payments, gift cards, movie tickets and contributions to health savings accounts. (Forbes puts $625 in an employee’s health savings account for completing a biometric screening or a preventative check-up).
The financial incentives work. They have a strong impact at bringing in the kind of people who really need the program, says Paul Fronstein, author of the EBRI report and director of the Institute’s Health Research and Education Program.
Fronstein looked at health data covering 2009 to 2013 from a large manufacturing employer headquartered in the Midwest with employees nationwide that introduced financial incentives for employees to conduct a health risk assessment and biometric screening. At first employees were offered a $50 gift card, and later they were offered a $20 reduction per month in health insurance premiums (a benefit of $240 a year). Younger, healthier employees completed the programs before the enhanced financial incentives were introduced, while older, less healthy employees responded to the increased incentives. The prevalence rate of diabetes, high blood pressure and high cholesterol were all higher in the post-incentive groups.
Employers may respond by providing higher financial incentives. Employees looking to reduce their health care costs should pay attention.
