Quick Summary: More employers are investing in incentive programs to increase employee participation in health programs and control health care costs. The strategy can be effective—if you follow a few simple rules.
As employers design their health plans to reinforce healthy behaviors, incentives are becoming a common tool. They can boost involvement in disease management programs, Health Reimbursement Accounts (HRAs), and other workplace initiatives.
Incentives can also decrease health care expenses for employers, according to a recent report by the Center for Studying Health System Change. The best-performing companies in the survey that use financial incentives saw health care costs increase just 1% in the past two years, compared with the average of 6.2%. Poor-performing companies, meanwhile, saw health care costs rise by 10%.
79% of employers say they’ll offer financial incentives next year (2009) to encourage healthy behaviors such as quitting smoking and losing weight.
Source: National Business Group on Health/Watson Wyatt
Here’s an easy-to-follow chart to scan when organizing your incentive plan:
* Design financial incentives as part of a larger strategy intended to treat employees more like health care consumers.
* Make the gist of your incentive program easy to explain to employees.
* Make the rules for receiving incentives simple and fair.
* Make the outcomes measurable (reducing BMI, for example)
* Make the rewards attainable, sufficient, and desirable.
* Consider cash as your only incentive option. Instead, reward with health-related products or time off work, for example.
* Ignore employees who express privacy concerns about making their health information available. Distrust can render your program ineffective and can affect the validity of information collected on health risk appraisals.
* Neglect to gain employee feedback during and after the program.
- Plan on conducting a health risk appraisal, which is now used by 83% of employers, compared with 65% in 2006, according to a Watson Wyatt survey.
- Poll employees to see what incentives types (such as cash or time off) they prefer.
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