Wellness Top Health Benefit Cost-Cutting Strategy

November 14, 2012 (PLANSPONSOR.com) Workforce health management, or “wellness”, has emerged as employers’ top long-term strategy for controlling health spending.

More than three-fourths of large employers (78%) say senior leadership is supportive or very supportive of health management programs as a means of encouraging more health-conscious behavior, according to the National Survey of Employer-Sponsored Health Plans, conducted annually by Mercer.  

The largest employers are the most likely to have formally measured the return on investment (ROI) of their health management programs (53% of employers with 20,000 or more employees). Of those, more than three-quarters say their programs have had a positive impact on medical plan trend.  

Perhaps because they are seeing results, employers are increasingly willing to invest in the success of these programs. For the third year in a row there was a sharp increase in the use of incentives or penalties to encourage higher participation: 48% of large employers with health management programs provided financial incentives or penalties, up from 33% last year. When non-financial incentives (such as recognition, gifts or lotteries) are included, this figure reaches 54%.  

At the same time, incentives have become more substantial. The most common incentive offered by large employers for completing a health assessment in 2012 is a reduction in the employee’s premium contribution; the median reduction in the annual contribution required for employee-only coverage is $260.   

In addition, a growing number of employers are providing incentives for achieving desired outcomes, instead of (or in addition to) incentives for participating in programs. Where incentives for achieving, maintaining or showing progress toward specific health status targets were rare in 2011, in 2012 nearly one-fifth (18%) of large-employer health management programs include them.  

The Mercer National Survey of Employer-Sponsored Health Plans is conducted using a national probability sample of public and private employers with at least 10 employees; 2,809 employers completed the survey in 2012. The survey was conducted during the late summer.