Sharp Increase in Use of Employee Incentives in Wellness Programs

An Aon Hewitt survey of nearly 2,000 employers representing approximately 20 million covered lives found that U.S. employers are increasingly relying on incentives to drive participation in health programs and encouraging employees and their families to take better care of themselves. 

Currently, 84 percent of employers offer employees incentives for participating in a health risk questionnaire (HRQ) and almost two-thirds (64 percent) offer an incentive for participation in biometric screenings. Just over half (51 percent) provide incentives to employees who participate in health improvement and wellness programs. The use of monetary incentives, in particular, has increased dramatically over the past year. In 2012, 59 percent of employers used monetary incentives to promote participation in wellness and health improvement programs, up from 37 percent in 2011. The use of monetary incentives for participating in disease/condition management programs almost tripled in 2012, from 17 percent in 2011 to 54 percent.

Aon Hewitt's survey shows a growing number of employers are beginning to link incentives to a result, as opposed to simply participating in a program. Of companies that offer incentives, 58 percent offer some form of incentive for completing lifestyle modification programs, such as quitting smoking or losing weight. About one-quarter offer incentives for progress or attainment made towards meeting acceptable ranges for biometric measures such as blood pressure, body mass index, blood sugar and cholesterol.

Critics caution against the potential privacy implications of the use of such rewards. What types of information should your employer be allowed to collect and use? There are also serious legal questions, too, about health-related rewards and penalties. While they're allowed under health laws like HIPAA (the Health Insurance Portability and Accountability Act of 1996), that doesn't mean companies couldn't face potential action in the courts. These questions could become more problematic as the ACA provision allowing an increase in premium differential from 20% to 30% to be tied to participation in wellness programs.