This document discusses employee health and wellness incentives from the perspectives of both employers and employees. It notes that employers spend on average $11,176 per year on health care coverage for each employee, while many employees are unaware or underestimate these costs. While most employers offer wellness programs, employees have mixed views about incentives. The document concludes by outlining new guidance for making outcomes-based wellness incentives fair and effective at improving employee health.

1. VS.
P e r s pective s o n Emplo yee Heal th & Incenti ves
Th e C o sts o f Em ploy ee Healt h
Em p lo y e r s
TABLE NO.
$8500
amount spent per
employee on health
care coverage in 2011
Employees
Guest Check
NO. PERSONS
CHECK NO.
453272
SERVER NO.
2 out of 3 can’t estimate how
much their employer spends on
health benefits6
Total bill for
health care
for each
employee
(employees
pick up the
difference)1
Total
{
{
$11,176
GUEST RECEIPT
NO. PERSONS
61%
DATE
CHECK NO.
453272
AMOUNT
View employees’
poor health habits
as the biggest
challenge to
maintaining
affordable benefit
coverage2
23%
$100
$100
Calculated the monthly
spend by employers to
be less than $500 per
month
$100
$100
$100
Many are not aware of the
connection between their health
a n d t h e h e a l t h c a r e d o l l a r, o r t h e
p o si t i v e i m p a c t o f r e l a t i v e l y sma l l
behavioral changes
We l l n e ss Pr o g r am In c en t iv es
E mpl o y e e s
Em ployers
To improve employee health
65% offer wellness programs
3
Most don’t want to feel
forced to participate
in wellness7
Agree
Used incentives with
wellness programs
Used incentives with
condition management
agree that
employers are right
to offer wellness
programs in an
effort to control
health care costs
77%
favor offering
a financial
reward to those
who meet
specific health
goals
80%
2011
Disagree
2012
How incentives are used5:
oppose charging
more for health
coverage if they
do not participate
in wellness
programs
68%
44% provide an incentive based
on tobacco-use status
29%
base on achievement of
outcomes such as body mass
index or cholesterol
22%
apply surcharges to employees
for not participating in
wellness programs
35%
oppose charging
more for health
coverage if they
don’t meet
health goals
71%
N e w Gu i d a n ce on In c en t iv es
To make outcomes-based incentives fair and effective with
improving employee health, recently published guidance9
suggests the following:
Avoid using a reward or
penalty that is so large it
discourages participation.
Use the 4 most
common targets of
weight, cholesterol,
blood pressure and
tobacco use.
Reward for progress
toward the standard
targets, instead of just
rewarding those who
meet the goal.
Help employees integrate
healthy behaviors by offering
personalized support, such as
a health coach, so they are
more likely to internalize and
sustain healthy behavior
changes over time.
For employees with a
medical condition that
makes it difficult to achieve
the health standard, defer
to the employee’s health
care provider for a
reasonable alternative
standard or a waiver.
To read more about
the JOEM guidance
on outcomes-based
incentives, visit
www.the-hero.org.
Sources:
The Road Ahead: Shaping Health Care Strategy in a Post-Reform Environment, Towers Watson/National Business
Group on Health, 2011
2
Performance in an Era of Uncertainty, Towers Watson/National Business Group on Health, 2012
3
Health Care Survey, Aon Hewitt, 2012
4
Ibid.
5
“Large Employers Expect Health Benefits Costs to Increase 7% in 2013, SHRM
6
“The U.S. Health Consumer is Health-Finance Illiterate and Resistant to Linking Wellness to Health Plan Costs,”
Health Populi, July 30, 2012
7
“Perceptions of Health Benefits in a Recovering Economy: A Survey of Employees,” National Business Group on
Health, July 26, 2012
8
Health Care Survey, Aon Hewitt, 2012
9
“Guidance for a Reasonably Designed, Employer-Sponsored Wellness Program Using Outcomes-based Incentives,”
Journal of Occupational and Environmental Medicine, July 2012
1
© 2012 Health Fitness Corporation