Most Employers Use Wellness Incentives, Disincentives

May 8, 2013 (PLANSPONSOR.com) – Eighty-two percent of companies responding to a recent survey offer some form of wellness incentives and/or disincentives.

There is also a growing interest in outcomes-based incentive strategies (i.e., reaching targeted biometric goals), according to the study conducted by the Midwest Business Group on Health (MBGH).  

Thirteen percent of employers are already offering outcomes-based incentives and 28% are planning to launch programs over the next one to two years, while 40% indicated interest, but need more information. Of those currently offering outcomes-based programs, 54% tie incentives to both outcomes-based measures (i.e., meeting specific targets such as BMI of 25) and improvements in outcomes (i.e., percentage decrease in BMI), versus one or the other.   

Onsite clinical screening programs are used by 94% of employers as the way to capture biometrics with the top measurements being:  86% blood pressure, 81% BMI, 73% cholesterol, 68% glucose, and A1c and waist circumference tied at 59% each.

Eighteen percent of employers are experiencing participation levels of more than 90% for outcomes-based programs; while the majority (60%) is experiencing participating levels of 40% to 80%. Employers indicate that 98% of employee feedback is "somewhat positive" to "very positive."   

Ninety-five percent of employers find some level of difficulty in implementing an outcomes-based program.   

Of the 18% of employers who reported not offering incentives or disincentives, 53% indicated the reason was that it was not part of their corporate culture, and 47% are not sure it works.   

For those employers offering incentives, 62% reduce premiums, 38% use gift cards and 35% offer merchandise. Of those employers that use disincentives, 43% increase employee share of premiums for noncompliance, and 14% have higher plan deductibles or out of pocket fees.

Activities that most employers' incented included biometric screenings (70%) and health risk assessments (78%), with the greatest disincentive (78%) being used for tobacco use.   

The monetary value of incentives programs varies widely, with $250 to $500 for 27% of those offering programs, $100 to $250 for 22% of employers and $500 to $1,000 for another 22% of firms.   

Employers indicated that 71% found their incentive strategy was "very successful" or "successful" and 45% viewed their disincentive strategy as "very successful" or "successful."   

With the Affordable Care Act (ACA), in 2014, allowing employers to increase their incentives from 20% to 30% of total coverage, nearly 67% said they are "very likely" or "likely" to do so and nearly 36% are "not very likely" or "not likely." For tobacco users, the ACA allows employers to increase the value from 20% to 50%, with 48% of employers indicating they are "very likely" to "likely" to do so, and 52% "not very likely" to "not likely."  

Nearly 100 employers completed the online survey conducted in April 2013. The responses represented businesses from a variety of industries and sizes. A summary of the findings is available here.

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