Wellness Incentives That Change Employee Behavior

Employers are always looking for incentives to help keep their employees happy and motivated. Google offers complimentary breakfast, lunch, and dinner; new parents—moms and dads—get up to six weeks of paid leave; and pets are welcome in the office. Starbucks offers a college achievement program with free online tuition. Advertising agencies typically have pool or ping pong tables for diversion. Add wellness incentives to the list.

Many companies are offering fitness or wellness programs, from free gym memberships to tobacco cessation programs. This approach has the dual intention of keeping employees healthier and reducing company health care costs. The question is, however, do these programs have the desired results?

The carrot and the stick: Employers are using both to boost wellness

A survey from Fidelity Investments and the National Business Group on Health reports that 90 percent of employers offer wellness incentives. And a systematic literature review of 47 randomized controlled trials found that economic incentives worked an average of 73 percent of the time. Incentives can be both positive and negative, with experts saying that avoiding a penalty has three times the motivational power of attaining a reward. Here’s how various large employers are implementing incentives and surcharges.

Safeway found a way to reduce costs

Safeway’s voluntary Healthy Measures program evaluates four measures of health: tobacco use, weight, blood pressure, and cholesterol levels. If employees “pass” all the tests, annual premiums are reduced by up to $780 for individuals and $1,560 for families. The program helped the grocery store chain keep their health care costs stable during a period when such costs to other companies rose by 40 percent.

What other companies are doing

CVS pharmacy requires all of its employees to submit to a medical exam or pay a $600 fine, while Scotts Miracle-Gro not only bans smokers from employment, it fires employees who smoke. Johnson & Johnson recoups its original $500 wellness incentive from employee paychecks if at-risk workers, identified through their health assessment, don’t agree to follow advice on how to improve their health.

Where there’s smoke there’s surcharge

Tobacco use is the behavior most likely to be subject to a surcharge, commonly in the form of higher coverage premiums. Since the ultimate goal is tobacco cessation and healthier employees, this surcharge is usually linked with incentives and support that are tied to short-term goals such as logging onto a Web program or completing coaching calls.

Washington state public employees face a monthly $25 per account surcharge above their premium if the employee or family member enrolled in coverage uses a tobacco product. The surcharge is waived if all adult tobacco users are enrolled in the plan’s cessation program.

Incentives and surcharges: An effective combination

Maryland is moving to the use of both incentives and surcharges for its state employees. Every employee will be expected to choose a primary care provider, take a health risk assessment, and discuss results with their doctor. Once they’ve done that, primary care visits, generic maintenance drugs for chronic conditions, lab, and X-rays will be covered with no copay.

Maryland employees who fail to choose a doc or have a health assessment could face a $50 annual premium surcharge. Members diagnosed with a chronic condition who fail to follow through on recommended treatments will have to pay an extra $250 in 2016. The following year these surcharges will climb even higher. Smokers will be offered free smoking cessation treatment; those identified as obese can obtain free nutrition counseling.