Survey: More Companies Offering Pay-for-Performance Incentives in Wellness Programs
A growing number of large companies with wellness programs are offering outcomes-based incentives, according to a new survey.
The survey, conducted by the Chicago-based benefits-software firm bswift, found that 24 percent of large employers (those with more than 500 benefits-eligible workers) offer incentives for employees who meet or exceed biometric thresholds – up from 15 percent in 2013 and 13 percent in 2012.
Nearly half of large employers are considering offering incentives for biometric test outcomes in the future.
“As CFOs and HR leadership take a closer look at wellness program results, outcomes-based approaches that tie dollars to employee health improvements will become more commonplace,” said Brad Wolfsen, executive director of bswift Exchange Solutions.
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Still, while employers expanded wellness programs and increased incentive amounts in 2013, employee participation rates dropped, with fewer companies achieving rates above 50 percent.
“The decrease in wellness participation rates underscores the ongoing challenge of maintaining employee engagement in wellness efforts and the importance of aligning program design, communications and incentives to maximize a program’s impact while integrating with the corporate culture,” bswift explains in a report on its fifth-annual survey. “Fundamentally, effective wellness initiatives must drive behavior change, and the first indicator of overall program effectiveness is employee engagement. Disengaged employees will not improve their health status.”
The survey found that employers have been slow to adopt the defined-contribution approach. More large employers are considering defined contribution (18 percent, up from 14 percent last year), the vast majority for medical benefits only. However, less than 1 percent of employers implemented the strategy for 2014, and it’s likely that the adoption rate will remain low for 2015 as well, according to bswift.
Employee self-service and automation saw the slowest growth in the past year, with some benefits enrollment functions trending in the wrong direction. Nearly 30 percent of large employers lack an online enrollment process for new hires and still rely heavily on paper and manual processes, according to bswift.
“The rise in public and private exchanges has created a clear shift in organizations’ approach to health care, and the prediction is that the transition to more widespread self-service and automation, outcomes-based wellness initiatives and adoption of defined contribution will accelerate,” said bswift CEO Rich Gallun.
The online survey of 388 benefits decision-makers revealed that biometric testing and health-risk assessments are the most common elements of wellness programs, with 84 percent of large employers indicating that they have those components in place. Fitness activities and smoking cessation are popular as well, with 81 percent of employers indicating that they have those initiatives in place.