June 3, 2008 — The number of employers offering workers financial incentives to better manage their health is expected to jump sharply next year, according to a survey by Watson Wyatt Worldwide, a leading global consulting firm, and the National Business Group on Health, a national nonprofit association of large employers.
The survey of 453 large employers found that half currently use incentives to encourage their workers to participate in health improvement activities, such as smoking cessation or weight management programs. By 2009, however, that number is expected to leap to 74 percent.
According to the survey, employers are using a wide range of financial incentives to promote healthier lifestyles — from completing health risk appraisals to participating in health improvement and disease management programs. While the majority of employers are rewarding healthy lifestyles, 6 percent are penalizing employees for poorly managing their health conditions.
Employers use cash or an equivalent reward most frequently as an incentive for participating in health engagement activities. However, some employers now tailor their programs, matching desired rewards with a specific behavior or activity.
Employers with a consumer-directed health plan (CDHP) are more likely to offer incentives. Twenty-six percent of companies with a CDHP offer financial incentives for managing health risk levels (e.g., weight, blood pressure) compared with 17 percent of companies without a CDHP. Similarly, 50 percent of CDHP companies offer incentives for participation in health improvement or disease management programs versus 35 percent of nonCDHP companies.