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Employer Use of Financial Incentives to Reward Healthy Behavior Expected To Surge
Date:5/29/2008

42%

Participation in smoking cessation program 40%

Participation in weight management program 31%

Management of cholesterol level, blood pressure 21%

Completion of consumer education module 12%

Maintaining a personal health record 7%

Employers use cash or an equivalent reward most frequently as an incentive for participating in health engagement activities. However, some employers now tailor their programs, matching desired rewards with a specific behavior or activity. For example, premium or deductible credits are more effective than cash at boosting health risk appraisal (HRA) participation. Seventy-three percent of companies that offer premium credits and 67 percent that offer deductible credits have at least half of their workforce enrolled in an HRA compared with 17 percent that offer cash and 12 percent that offer no incentive.

"Companies are targeting specific results with incentives that align with their business goals and matter most to their workers," said Bruce Kelley, senior group and health care consultant at Watson Wyatt. "For these types of rewards to be effective, it's a matter of tailoring the incentive to the desired behavior and ensuring that employees are more involved in the process."

Employers with a consumer-directed health plan (CDHP) are more likely to offer incentives. Twenty-six percent of companies with a CDHP offer financial incentives for managing health risk levels (e.g., weight, blood pressure) compared with 17 percent of companies without a CDHP. Similarly, 50 percent of CDHP companies offer incentives for participation in health improvement or disease management programs versus 35 percent of non-CDHP companies.

"A second generation of incentive programs that rewards a new range of health care choices such as selecting high-quality doctors and providers is around the corner," said Nussbaum. "Empl
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SOURCE Watson Wyatt Worldwide
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