“Wellness benefits” certainly sound like a great thing—meant to inspire better health habits, they represent the "preventative health care" many have been clamoring for. But do they work? Not always, and it's starting to give employers a headache.
First, it helps to understand what exactly wellness benefits are, and why employers have increasingly hopped on board with them:
It’s a growing trend for health insurance companies to have wellness benefits of some kind. These could include providing informational materials to subscribers on subjects like healthy diet, cardiovascular health, or quitting tobacco use. Some insurance companies will pay for employees to participate in programs designed to increase health like tobacco subsistence programs, and others merely offer information and advice, that if subscribers follow, is likely to assist in healthier living. Sometimes encouraging employees to get regular scans or physical exams at certain ages is thought of as part of wellness benefits, since this gives doctors the opportunity to help patients that have any markers or risks for diseases…For insurers, they may reduce total cost of claims paid, which maximizes profits. This assists employers too, because a healthier workforce translates to less expensive premiums. Additionally, employees may be served by these programs because by following the advice given by insurance companies on how to lead more healthful lives, they may truly improve health.
Good idea, but the problem is, too often these benefits haven't been showing results. A recent study by the National Business Group on Health and Towers Watson found that:
While employers remain committed to offering health and productivity programs, they are frustrated by the inability of many workers to change their health habits. In an effort to encourage healthy behaviors, a growing number of employers are tightening their requirements for workers to receive financial incentives.
More than half of large employers now offer these kinds of incentives to workers who are willing to enroll in programs designed to improve their health, the study found. But more than a third of them now reward only those who “pass” or complete the program, in the company’s eyes. Twenty percent only reward employees who participate in more than one such program.
"Employers are frustrated by their employees' low use of expensive health improvement programs," said Ted Nussbaum, senior consultant at Towers Watson. "As employers continue to empower workers to be more health focused, they are beginning to target and reward those workers who demonstrate a real commitment to making positive lifestyle changes."
Some employers are stepping up their efforts. As Stephen Miller of the Society for Human Resource Management writes:
While U.S. companies continue to use financial incentives as a way to increase employee participation in health and wellness programs, a new survey by consultancy Hewitt Associates shows that employers’ appetite for penalizing workers for unhealthy behaviors is also on the rise.
This shift in strategy suggests that companies increasingly are challenging employees and their dependents to be accountable for the decisions they make regarding their health…Hewitt’s annual health care trends survey of nearly 600 large U.S. employers—representing more than 10 million employees—shows that nearly one-half (47 percent) use or plan to use financial penalties over the next three to five years for workers who do not participate in certain health improvement programs.
Eighty-one percent of companies who plan to penalize unhealthy behavior say they’ll consider higher health insurance premiums. Most of the rest plan to increase deductibles and out-of-pocket expenses. These companies could be looking at a “smoker surcharge” (64 percent), mandatory disease or behavior management programs (50 percent), mandatory biometric screenings (45 percent), health coaches (25 percent) or mandatory biometric improvements such as lowered blood pressure (17 percent).
Almost all the employers who had wellness benefits, the NGBH study found, planned to keep them, and many were adding new ones. So despite the complications, no one seems to be giving up on wellness benefits just yet.
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