Quick Summary: A growing number of employers are using financial incentives to encourage employees to adopt healthier lifestyles and participate in wellness initiatives. Doing so can be effective, but cash (or another incentive) should be only part of your strategy.
Approximately two-thirds of the employers currently offering wellness programs use financial incentives to encourage participation, according to a recent survey of members of the ERISA Industry Council and the National Association of Manufacturers.
These organizations are getting creative in their methods, moving well beyond money. For example, employees for the city of Colorado Springs , Colo. , earn credits for engaging in activities such as health screenings and smoking cessation. They can redeem those credits for prizes. Other tactics include reducing monthly health premiums and awarding vacation packages for top wellness participants.
But it’s folly to assume that offering an incentive will be effective—or even simple:
Think Beyond the Carrot
Experts say incentives should be part of an overall plan that’s supported by educational materials about the benefits of improved health, online tools to track progress in the wellness program, support groups, motivational posters, and other resources and messages.
The incentive can serve as the “carrot,” but to bring about behavior change (improve employee health), become interested in the entire garden— long-term ways to grow employee motivation, so they become engaged with the idea of wellness.
A smart step: Analyze your corporate culture and figure out what most motivates your employees (some cultures value a day off; others prefer cold hard cash). Then focus on the health issues that are most relevant to your workforce (if you conduct a health risk assessment, you will know the risk areas to focus on).
Most wellness program incentives are governed by the Health Insurance Portability and Accountability Act (known as HIPAA) and other federal and state anti-discrimination laws, which determine how offerings must be attainable by all, among other factors.
4 Rules That Govern Wellness Program Incentives
• The incentive (or penalty, if you go that route) can’t exceed 20% of the cost of employee-only health care coverage.
• The program must give eligible individuals the opportunity to qualify at least once a year.
• There must be a reasonable alternative standard to obtain the reward for anyone dealing with a medical condition, or for whom satisfying the standard is medically inadvisable.
• The plan must disclose program terms and conditions in all printed or online materials.
• After choosing wellness program incentives that best fit your workforce, plan a communication strategy that reinforces how attainable and desirable the incentive is.
Hope Health, All Rights Reserved.