The use of incentives and penalties as a way to increase employee participation in health and wellness programs is on the rise as employers strive to contain health care costs. An annual study conducted by Hewitt Associates, an HR consulting and outsourcing company, shows that almost half of the large U.S. employers surveyed (47 percent) are using or plan to use penalties in the next three years as a way to hold employees and their dependents accountable for the decisions they make regarding their health.
Interest in the use of penalties is based on the belief that some employees might be more motivated to take action if they risk losing money. Penalties imposed for unhealthy behaviors and for not participating in health improvement programs include surcharges and increased premiums, deductibles, and out-of-pocket costs. Examples of behaviors that employers are penalizing include:
The use of incentives is also growing. More than half of employers surveyed (58 percent) offer employees incentives for participating in health and welfare programs. Of these, almost a quarter (24 percent) extend these incentives to spouses or family members. Incentives include cash payments for completing a health risk questionnaire and participating in health improvement, wellness, or disease management programs.
There is not a one-size fits all solution to implementing strategies and designing programs aimed at increasing employee participation in health and wellness programs. Hewitt officials state, “The key for each employer is to find the right mix of incentives and penalties that will motivate employees to be healthier.”
—“Hewitt Survey Shows Growing Interest Among U.S. Employers to Penalize Workers for Unhealthy Behaviors,” Hewitt Associates Web site, March 17, 2010.
