Wellness programs are all the rage, but if your plan sponsor clients want to get unhealthy workers to participate, they’re going to have to spend some money.
According to an analysis by the nonpartisan Employee Benefit Research Institute (EBRI), firms offering wellness programs should expect to have to employ financial and other incentives to encourage member participation. Relatively low financial rewards may attract the young and healthy. Higher financial incentives — while more costly for the employer in the short run — may bring in older, less healthy employees who are consuming more health services and thus accounting for a large proportion of health care spending.
Using administrative data from a large employer that provided anonymous participant information, the nonpartisan Employee Benefit Research Institute (EBRI) analyzed the impact that financial incentives had on the first-time participants in the employer’s wellness programs.
Specifically, EBRI looked at those who completed a health risk assessment (HRA) — a questionnaire that individuals can complete to evaluate their health risks and quality of life — or biometric screening in the two or three years after financial incentives were offered to workers to participate. The report found that older men were most likely to respond to incentives: Among employees who first completed an HRA post-incentive, 82.4% were male, versus 70.2% pre-incentive.
The report found that employees who delayed completion of an HRA and/or biometric screening were more likely to be male, older, higher wage earners and in poorer health, and to have higher prevalence rates of obesity, diabetes, pre-hypertension, high blood pressure and high cholesterol.
If wellness programs are effective at improving patient health, positive longer-term returns on investment may support the use of high financial incentives.
Employers of all sizes utilize various types of health management solutions, including wellness programs designed to promote health and prevent disease, as well as disease management interventions, which are designed to manage patients with chronic conditions. According to the EBRI report, among larger employers, about four-fifths use case management, disease management, nurse advice lines and health assessments, with about one-half offering employees financial incentives for participation (smaller firms also employ health management solutions, although they are less likely than larger employers to do so).
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) prohibits discrimination against individuals based on health status, but does allow employers to provide rewards or financial incentives for employee participation in a wellness program. While HIPAA allows for incentives up to 20% of the total cost of coverage, a maximum of 30% is now legal under the Affordable Care Act, which also allows up to 50% in incentives for interventions designed to prevent or reduce tobacco use.
