Employers Press for Results from Investment in Wellness Perks & Incentives

Linking rewards to results is no longer exclusive to the domain of cash compensation.  IBM made the news last year with its pursuit of a performance-based 401(k) plan.  Now we see a growing number of employers demanding clearer results from wellness activities before handing over any perks or financial incentives.

A survey conducted jointly by Towers Watson and the National Business Group on Health (and covered in a recent Los Angeles Times story) found that a growing number of employers will be imposing tighter requirement for health and wellness incentives like reduced-cost gym memberships, free weight loss or smoking cessation programs.

From the National Business Group on Health's press release:

Currently, more than half (53%) of large employers offer financial incentives to workers who enroll in health engagement activities, such as weight management or smoking cessation programs. But, for many employers, participation alone is no longer enough to earn an incentive. Now, more than one-third of employers (37%) reward only those workers who meet the company's requirements for completion of a health engagement activity, and almost one-third (29%) only reward members who participate in multiple activities, according to the 15th Annual NBGH/Towers Watson Employer Survey on Purchasing Value in Health Care. Still, most employers (93%) have no plans to eliminate their health promotion programs, and 83% have no plans to cancel or delay adding new ones.

"Employers are frustrated by their employees' low use of expensive health improvement programs," said Ted Nussbaum, senior consultant at Towers Watson. "As employers continue to empower workers to be more health focused, they are beginning to target and reward those workers who demonstrate a real commitment to making positive lifestyle changes."

A sign of the times ... and it seems an obvious parallel to what is happening overall in the employment relationship.  Similar to the shift that is prodding employees toward more active ownership of their own job security, we are moving to a health program design that encourages their more active engagement in their own healthcare management.

Image: Creative Commons Photo "Adidas for Workout" by kekka

Comments

[fran melmed]

hi ann,

i recently wrote an article for sloan work and family research network on this survey. it makes a lot of sense to provide incentives to drive participation and to motivate behavior/reward completion. i'm a little surprised by companies feeling frustrated when we are still in early stages of understanding how to create health cultures in the workplace. at any rate, you might be interested in the article: http://wfnetwork.bc.edu/blog/employers-miffed-at-employees%E2%80%99-lack-of-health-engagement-get-real.

btw, this blog and compensation cafe are terrific.

f

[Ann Bares]

Fran:

Thanks for the comment and the link to your thoughtful, well-written article. Readers, be sure to click through to read Fran's piece - a nice counterpoint.

[Bridget Bishop]

No one wants to seriously address the reason that someone may over-eat, self-medicate through drinking, or stay away from their desk chain smoking -- that being a toxic workplace.

I signed up for heath coaching, which consisted of a person calling me every night and whining in my ear about how I had to "live better". I received these daily phoe calls after being degraded and demeaned by a management structure that was so out-of-control that neither the corporate ombuds program or our HR department wanted to address the problem.

If people are serious about improving health, these companies providing health coaching needs to compile some information about the corpoprate culture and identify functions or individuals who are bullies or practice toxic leadership. If a member of management refuses to seek or be counselled if a problem is found, then they should have their health benefits cut (or better yet their bonus) until they do something to improve their skills.

[Mike]

The problem is twofold. First, wellness programs were oversold, and employers expectations are too high. Did your employee become unhealthy in 1 year? Probably not. Why would someone expect results in 1 year, results that would actually translate to reduced claims?
Second, most employers dont have the tools to measure results, its all pretty generic data, and involves long term prevention trends, not short term results. Its hard to measure how much impact your wellness program has on say, diabetes, without having metrics on a sample 'disease specific' population and actual claims incurred.

If large employers are seeking ROI from benefits investments, they'd do a lot better looking to Disease Mgt/Case Mgt programs, as this focuses on where the money is actually being spent, and how the spend can be better managed. Analagous to T&E Mgt systems that lower costs of actual travel thru aggregation/contract compliance etc. The first step is to reduce unnecessary travel, then pay 'best rate' for travel incurred. (And both have standards from the Feds for comparison & benchmarking).

[Wally Bock]

Congratulations! This post was selected as one of the five best independent business blog posts of the week in my Three Star Leadership Midweek Review of the Business Blogs.

http://blog.threestarleadership.com/2010/04/28/42810-a-midweek-look-at-the-independent-business-blogs.aspx

Wally Bock