Wellness Incentive Spending Doubles over Four Years

By Stephen Miller, CEBS Mar 1, 2013

Corporate employers plan to spend an average of $521 per employee on wellness-based incentives in 2013. This marks an increase of 13 percent from the average of $460 per employee reported in 2011, and double the per-employee average of $260 reported in 2009, according to an employer survey by the nonprofit National Business Group on Health and Fidelity Investments.

Data for the survey were collected in October and November 2012 from a sample of 120 U.S. companies spanning a range of fewer than 2,000 to more than 50,000 employees.

In addition to higher spending on wellness-based incentives, the survey found that the overall use of these incentives among corporate employers continues to increase. Nearly nine out of 10 employers (86 percent) surveyed indicated that they offered wellness-based incentives, an increase from 73 percent in 2011 and 57 percent in 2009.

The most popular wellness-based incentives continue to be:

  • A decrease in premiums (offered by 61 percent of employers).
  • Cash or gift cards (55 percent).
  • Employer-sponsored contribution to a health savings account or similar health care-based savings vehicle (27 percent).

While the percentage of employers offering wellness-based incentives has risen across all markets, the results illustrated significant growth in the midmarket, where 77 percent of employers plan to offer wellness-based incentives in 2013—more than double the 38 percentage of midmarket employers that offered such incentives in 2010. In addition, almost half of employers in the midmarket (45 percent) plan to offer average incentives of more than $500 per employee.

Reaching Out to Spouses and Dependents

A majority of employers (54 percent) will expand their wellness-based incentives to include dependents, up from 45 percent in 2011. And almost half (49 percent) will include spouses/dependents in communications about wellness programs.

Requiring Risk Assessment or Biometric Testing

Fifteen percent of employers are mandating that employees complete a health activity—like an employer-sponsored biometric screening or a health risk assessment—in order to determine their eligibility for one or all of the company's health plans in 2013. The survey results further revealed that:

  • 10 percent of employers will be requiring workers to complete a health assessment or risk being moved automatically into a less attractive subset of the company’s health plan.
  • 7 percent of employers indicated that failure to complete a biometric screening would result in an employee being switched into a less attractive subset of the company’s health plan.
  • 3 percent of employers indicated that failure to complete a health assessment or biometric screening would result in a loss of benefits for 2013.

Tailoring Programs to Reward Behavior

Forty-one percent of employers include, or plan to incorporate, outcomes-based metrics as part of their incentive program; this gives both employers and employees a measurable goal that can be used to reward behavior or results in certain health categories, such as lowering cholesterol (used as a goal by 30 percent of employers) or blood pressure (29 percent) or reducing waist measurement (11 percent).

“An increasing number of employers understand how wellness programs contribute to a healthy workforce,” said Helen Darling, president and chief executive officer of the National Business Group on Health. “And it’s encouraging to see employers take the necessary steps to tailor their wellness programs in a way that will [incentivize] and motivate their employees to engage in health-improvement activities, and find ways to reward them for their progress.”

Stephen Miller, CEBS, is an online editor/manager for SHRM.

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