|Survey Reveals Employers’ Spending On Incentives For Health Management Programs
Major U.S. employers using incentives to promote
employer-sponsored health and wellness programs rose from 62 percent to
71 percent between 2007 and 2008, according to a new report by the
ERISA Industry Committee (ERIC), the National Association of
Manufacturers (NAM) and IncentOne Inc.
Also included is new data about what programs employers
reward, how much they spend and what they expect in return for their
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 a low of $5 to a
high of $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 NAM. "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."
Employers are experimenting with the types of incentives
they offer, sometimes offering different incentives and amounts for
different types of programs. While last year’s results showed a
definite 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 report said.
The survey of 225 major U.S. companies employing 7.6
million employees also delved into employer expectation for
return-on-investment (ROI) for health and wellness programs, finding
that 83 percent of those who have measured 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
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, the report said.
"More employers have learned that investment in their
employees’ health is smart – it brings a positive return,"
said ERIC 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."
Companies offer incentives for programs and behaviors.
Behavior-Earning Incentives – 2008 Only
- Participation in program – 48 percent
- Completing a program – 38 percent
- Signing up for/enrolling in program – 25 percent
- Achieving outcomes/goals during program – 16 percent
- Achieving outcomes/goals after program – 12 percent
- Maintaining outcomes/goals after program – 6 percent
- Leading groups to participate in program – 2 percent
- Recruiting others into program – 1 percent
Source: 2008 NAM, ERIC, IncentOne Survey of Major Employers, Use of Incentives
Addresses: ERISA Industry Committee, 1400 L St. NW, Suite 350, Washington DC 20005; (202) 789-1400, www.eric.org. National Association of Manufacturers, 1331 Pennsylvania Ave. NW, Washington DC 20004; (202) 637-3000, www.nam.org. IncentOne Inc., 160 Chub Ave., Suite 203, Lyndhurst, NJ 07071; (800) 847-0863, www.incentone.com.