When Employers Should Use Incentives

AON Hewitt recently surveyed more than 2,000 employers in the U.S. about how they incent employees for participating in health programs. The results showed that many employers are increasing incentives to encourage and promote employees to participate in their programs.

What programs are incentives offered for?

An average of 59 percent of employers are using monetary incentives as a tactic to get employees to participate in wellness programs. Using incentives in a disease/condition management program has almost tripled in 2012 from 17 percent to 54 percent. Employers also use the following programs:

• The majority of employers (84 percent) provide employees with an incentive for participating in a health risk questionnaire.
• Almost two-thirds of employers (64 percent) incent employees for participating in a biometric screening.
• More than half (51 percent) provide incentives for employees who participate in a health improvement and wellness program.

Results Matter

Aon Hewitt also gathered key insights on using incentives to their full advantage. More than half (58 percent) of employers that offer incentives only offer them after the individual has completed a lifestyle change such as losing weight, quitting smoking or reducing blood pressure. However, other survey responses cast doubt on that statistic. 80 percent of employers offer an incentive for completing a health risk questionnaire, but only 10 percent of employers provide a reward for improving on results of the questionnaire. The same goes for biometric screenings — 60 percent of employers provide an incentive for completing the screening but less than 10 percent provide anything when an individual takes action on the results.

Next Steps

Employers are now realizing how little impact just participation has in health care costs and are adopting value-based insurance design (VBID) as a tactic to engage employees in managing their chronic conditions.

One type of VBID uses incentives or modified coinsurance as a bargaining tool for employees to use high-performance providers. Employers can also target health conditions and require employees to participate in programs that will enhance their lifestyle which can lead to a reduction of health care costs for the organization.

Read the full survey here. (5 MB)