Tip Tuesday! Wellness: Use of incentives (and penalties) climbing - because they work

October 27, 2011 by Christian Schappel

Between 2009 and 2011, the use of financial rewards in health management programs increased by 50%. Meanwhile, the use of penalties increased by more than 100%, according to a new study.

The numbers show employers are starting to quickly warm up to the idea of penalizing workers for not participating in wellness programs — or not meeting certain health goals.

The findings are from The Towers Watson/National Business Group on Health Staying@Work study of 248 U.S. companies. 

A year from now, four in five companies expect to offer some type of financial reward for wellness/health management participation. But more surprising, the use of penalties is expected to double again (this time, in just one year) — with 38% of companies planning to use them in 2012, compared to 19% today.

What isn’t a surprise is why so many employers are using financial incentive/penalties to drive participation: They work!

Check out these stats:

• Among employers offering financial incentives to take health-risk appraisals, employee participation rates are 46% on average — compared to 19% at companies not offering incentives
• Participation in biometric screenings for those giving out cash to take them is 45% — compared to 25% for those keeping their wallets closed, and
• Participation rates are low for all disease management programs designed to deal chronic conditions at 14%, but providing financial incentives provide a slight bump in participation rates to 16%.

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