Employers' use of incentives to promote health and wellness programs rose from 62 percent to 71 percent between 2007 and 2008, according to a report released today. The new data reveals what programs employers reward, how much they spend and what they expect in return for their investments.
The ERISA Industry Committee, the National Association of Manufacturers and IncentOne Inc. conducted the survey of 225 major U.S. companies employing 7.6 million employees.
Responses revealed a wide range in the value of incentives offered for a host of different programs. For instance, incentives for weight management programs ranged from $5 to $500, and for smoking cessation programs from $5 to $600. The average value of incentives per person per year ranged between $100 and $300, with an overall average of $192 per person per year.
"More than three out of four major employers are using health and wellness programs in an effort to rein in costs that continue to soar year after year," said John Engler, president and CEO of the National Association of Manufacturers. "But trinkets and T-shirts aren't enough to motivate employees for the long term. Employers are keenly interested in innovative ways to lower costs and enhance productivity. Incentives are proving an effective tool to engage employees and keep them interested in these programs."
While last year's results showed a skew towards offering premium reductions over other types of incentives, gift cards came out on top in 2008 as the most popular incentive employers offer, with premium discounts and cash incentives following closely behind.
The survey found that 83 percent of those who have measured the ROI for their incentives are seeing program returns of better than break-even. The percentage of employers who have successfully measured ROI for their health and wellness programs almost doubled since last year, but still remains less than 30 percent.
"The survey findings reveal that use of incentives among large employers is broad, but the science of incentives management is still evolving," said Michael Dermer, president and CEO of IncentOne. "Success in health and wellness programs will require employee engagement and motivation over time. That suggests a need for a combination of incentive design strategies and effective employee communication techniques that are tailored to a company and its employee culture."
Employers are using other measures to evaluate program success, such as completion of health risk assessments and program participation. When it comes to incentives, employers are much more likely to reward program participation and completion than to reward employees for meeting specific program goals, such as smoking cessation or losing weight. In fact 48 percent of survey participants said they would offer incentives just for participation in a program.
"More employers have learned that investment in their employees' health is smart -- it brings a positive return," said ERISA Industry Committee President Mark Ugoretz. "But directing resources towards workers' health must be balanced with an understanding of how incentives work within these programs. This survey shows that employers are serious about understanding the business case for incentives for employee engagement and participation. They want to make the most of these programs that can both lower costs and improve productivity."
What types of incentives do you offer your employees and for what? Do you see a ROI for this type of program? E-mail Associate Editor Molly Merrill at molly.merrill@medtechpublishing.com