Using Incentives in Corporate Wellness Programs

As an answer to the growing problem of rising healthcare costs, companies are implementing wellness programs with incentives like cash, discounts and prizes to entice employees to participate. In many of today’s corporate wellness programs, employees are being rewarded for choosing to live a healthy, active life.

With each reward offered, the companies get a return on their investment – as in healthier, more productive employees who are less likely to miss work due to illness. They also see lower claims costs with employees who participate in the wellness programs.

Numerous studies have shown that not only can company-sponsored wellness programs control overall healthcare costs, it also can monitor high-risk employees, such as diabetics, and offer treatment options. The promotion of a healthier lifestyle is an added bonus of these types of programs.

It’s no wonder that corporations and government institutions nationwide are gravitating towards wellness and using incentives to attract employees. The following is an example of what companies from large to small are doing to create a healthier workforce:

·    Gallatin Steel offers its employees incentives to take a Health Risk Assessment. If they take the assessment, they receive a 50% reduction in their monthly healthcare cost contributions. That means a family of four would only pay $50 a month instead of $100 a month.

·    Ottawa Dental Laboratory has a health rewards program for employees who participate in the company’s wellness program Workers earned “Vitality Bucks” that they can redeem for prizes such as a big-screen TV, iPod or Weber grill.

·    Totes-Isotoner Corporation of Cincinnati, Ohio supports employee wellness by offering 100% preventative care coverage and holds health fairs where employees can have access to biometric screenings and health evaluations onsite.

·    Worthington Industries’ wellness program helps their employees lose weight, detect diseases early and also improve worker morale. The program was part of the company’s health care plan and offered employees discounts toward their medical coverage when certain health requirements were met. Over two-thirds of Worthington’s employees participated in the program and the company has an ROI ratio of 2.15 to 1.

These types of incentives are becoming more prevalent as companies realize the importance of corporate wellness programs. The National Business Group on Health and Watson Wyatt conducted a study which reported that close to 50% of the employers offer wellness incentives to entice their workers to live healthier. With return on investment in mind, organizations large and small have an incentive to use incentives in efforts to improve worker health.

More incentives for employers are on the way as Congressional leaders get involved. Recently, Senators Tom Harkin, D-Iowa, and Gordon Smith, R-Ore., authored the Healthy Workforce Act which would give businesses tax credits of up to $200 per employee for the first 200 employees and $100 per employee for the rest of the payroll for initiating workplace wellness.

Organizations would need to spend $400 per employee on a comprehensive program that includes three of the following components: a health awareness and education program; a behavioral change program; an employee engagement committee; and incentives for participation, such as a reduction in health premiums.

Sources:

Selko,Adrienne. “Prescription for Survival: How to Control Healthcare Costs”. www.industryweek.com, January 1, 2008.

Selko,Adrienne. “Wellness Incentives Are Paying Off”. www.industryweek.com, September 18, 2008.