Almost two out of three U.S. companies offer programs to keep employees healthy, and 66 percent of those offering programs use incentives, with a healthy number showing a return on investment (ROI) of greater than $1 for each dollar spent.
The findings are part of a survey, now in its third year, that tracks how much U.S. employers pay in incentives, what activities they incentivize, and how success and ROI are measured. The report, How Employers Use Incentives to Keep Employees Healthy: Perks, Programs and Peers, was conducted by Health2 Resources, a firm providing health care trend research.
"During tough economic times, employees who take control of their health and are more engaged and active in their own health are valuable assets," says Katherine H. Capps, president of Health2 Resources. "We are not talking about $5 here or there. We are talking about serious investment into productivity, made by employers with as few as 200 employees, for as much as $1,400 a year per employee. Employers are taking control of health care costs by creating smart, effective new strategies to keep employees healthy, and to keep employees at work."
Among the key findings:
• The value of incentives is up, averaging $329 in 2009 and ranging from $1 per pound for weight loss to annual premium reductions valued at more than $1,500. The most commonly used incentive is premium reductions, followed by merchandise/tokens and gift cards.
• More offer cash and gift cards to spouses and family members to keep them healthy. More than half of the companies surveyed offer health and wellness or disease management programs to spouses and a third extend the programs to other family members.
• Confidential health history/questionnaires are an important starting point for worksite wellness and disease management. Two out of three U.S. employers—large, mid-size and small—offer a health risk assessment to employees, and nearly three out of four of those offer incentives to take it. Incentives to take the questionnaire range up to $300 annually, with about 10 to 15 percent exceeding $300.
• Smoking cessation programs are the most popular health and wellness program offered. More than half of employers surveyed (53 percent) offer smoking cessation to employees, but weight management and physical activity programs are not far behind.
• Diabetes programs are the most popular disease management program offered. Among those employers that offer disease management programs, 92 percent offer diabetes programs, making them the most common disease management program offered in 2009.
• Company size matters but doesn't dictate value of incentives. Among large employers, a bigger percentage offers programs and incentives when compared to small and mid-sized companies. But some organizations with as few as 210 employees are offering incentives valued at $1,450 per year to keep employees healthy, well above the average.
• Results count, and employers are counting. The percentage of U.S. companies measuring ROI successfully for health and wellness programs has increased sharply over the years, from 14 percent in 2007 to 73 percent in 2009. Some 83 percent of those who have measured say the programs return better than 1:1 on their investment. In growing numbers, employers are rewarding goal achievement during and after health and wellness program completion.
• Employers face challenges to program success, but challenges wane. Among employers with programs and those without, nearly every challenge—even the top challenge of motivating employees over time—has lost intensity.
"Employers are becoming more sophisticated about measuring the return on investment from wellness and disease management programs, and today's economic outlook dictates that these programs bring a positive ROI," says Sean Sullivan, president and CEO of the not-for-profit Institute for Health and Productivity Management. "No other kind of health management program has been given the same scrutiny as health and productivity management in measuring its effectiveness in reducing total health-related costs, including sick days, disability claims and impaired performance at work. Employees are too valuable a human capital investment for companies to take their health and productivity for granted."
Company case examples in the report further demonstrate the evolving nature of health and wellness and disease management programs and how employers are working to match the specific health improvement needs of their organizations to the programs that are most effective.
Stephen Miller is an online editor/manager for SHRM.
Practices Shared for Lowering Costs, Improving Health, SHRM Online Benefits Discipline, April 2009
Employers Focus on Wellness Participation, Not Outcomes, SHRM Online Benefits Discipline, October 2008
Wellness: To Promote Health, 'Carrots' vs. 'Sticks,' SHRM Online Benefits Discipline, August 2007
Wellness: Financial Incentives--Tips for an Effective Program, SHRM Online Benefits Discipline, May 2007
Video: Effective Wellness Incentives, SHRM Multimedia, October 2008
Webcast: Containing Health Care Costs through Wellness Incentives, SHRM Multimedia, September 2007
Quick Link:SHRM Online Benefits Discipline