BOSTON--()--According to a new employer survey conducted by Fidelity Investments® and the National Business Group on Health (NBGH), corporate employers plan to spend an average of $521 per employee on wellness-based incentives within corporate health care programs. This marks an increase of 13 percent from the average of $460 reported for 2011, and is double the per employee average of $260 reported in 2009.
“And it’s encouraging to see employers take the necessary steps to tailor their wellness programs in a way that will incent and motivate their employees to engage in health-improvement activities and find ways to reward them for their progress.”
The survey is the latest in a series of studies Fidelity and the NBGH have conducted since 2009 to analyze the growth of health-improvement programs, or “wellness” programs, in the workplace. These programs typically consist of condition-management services (e.g., managing insulin treatments), lifestyle-management services (e.g., weight loss advice), health-risk management services (e.g., on-site flu shots), and environmental enhancements (e.g., bike racks, walking paths).
In addition to an increase in the average amount employers plan to spend on wellness incentives, the survey found that the overall use of wellness-based incentives among corporate employers continues to increase. The study found that nearly nine-out-of ten employers surveyed indicated that they currently offer wellness-based incentives (86%), an increase from 73 percent from 2011 and 57 percent from 2009.
And while the percent of corporate employers offering wellness-based incentives has increased across all markets, the survey results illustrated significant growth in the mid-market, where 77 percent of employers plan to offer wellness-based incentives in 2013, and more than double the 38 percent of mid-market employers that offered wellness-based incentives in 2010. In addition, almost half of employers in the mid-market (45%) plan to offer average incentives of more than $500 per employee.
“As the cost of providing health care continues to increase, employers recognize one of the key ways to manage their company’s costs is to incent their workforce to lead a healthier lifestyle,” said Adam Stavisky, senior vice president of Fidelity’s Benefits Consulting business, which commissioned the study with NBGH. “Employers of all sizes have embraced wellness-based incentives to help control costs, and companies are now looking at ways to design and optimize their programs to maximize their positive impact on health for both the organization and employees.”
Employers Tying Employee Eligibility to Completion of Risk Assessment or Biometric Testing
The study also showed that 15% of employers surveyed are requiring employees to complete some sort of health activity – such as an employer-sponsored biometric screening or health risk assessment (HRA) – in order to determine their eligibility for one or all of the company's health plans in 2013. The survey results showed that 10 percent of employers will be requiring employees to complete an HRA or risk being defaulted into a less attractive subset of the company's health plan, while 7 percent of employers indicated failure to complete a biometric screening would result in being defaulted into a less attractive subset of their company's health plan. In addition, 3 percent of employers indicated that failure to complete an HRA or biometric screening would result in loss of benefits for 2013.
Companies Continue to Tailor Programs to Increase Participation, Reward Behavior
This year’s survey found that an increasing number of employers are actively managing and expanding their wellness programs and offering incentives designed to increase participation and encourage positive behavior. The most popular wellness-based incentives continue to be a decrease in premiums (61%), cash or gift cards (55%) or an employer-sponsored contribution to a Health Savings Account or similar heath care-based savings vehicle (27%).
This year a majority of employers (54%) will expand their wellness-based incentives to include dependents, up from 45 percent in 2011. And almost half (49%) will now include spouses/dependents in communications about wellness programs.
Employers are also tying wellness-based incentives to an increasing number of health-improvement activities. These include popular activities such as smoking cessation programs and discounts for gym memberships, as well as new options such as employer-sponsored fitness challenges (increasing 10 percent in 2013), and discounts for health food options in the company’s cafeteria (increasing 9 percent in 2013).
The study also found that 41 percent of employers currently include, or plan to incorporate, outcomes-based metrics as part of their incentive program – this gives both employers and employees a measurable goal that can be used to reward behavior or results in certain health categories, such as lowering cholesterol (30%) or blood pressure (29%), or reducing waist measurement (11%).
“An increasing number of employers understand how wellness programs contribute to a healthy workforce,” said Helen Darling, president and chief executive officer of NBGH. “And it’s encouraging to see employers take the necessary steps to tailor their wellness programs in a way that will incent and motivate their employees to engage in health-improvement activities and find ways to reward them for their progress."
Data for the survey was collected online in October and November of 2012 by the National Business Group on Health in conjunction with Fidelity and is based on responses from a national sample of 120 companies from numerous industries including transportation, health care, technology, entertainment, consumer products, retail and energy. The sizes of the companies spanned a broad range, from less than 2,000 to more than 50,000 employees. The results of this survey may not be representative of all companies meeting the same criteria as those surveyed for this study.
About the National Business Group on Health
The National Business Group on Health is the nation's only non-profit organization devoted exclusively to representing large employers' perspective on national health policy issues and providing practical solutions to its members' most important health care problems. NBGH helps drive today's health agenda while promoting ideas for controlling health care costs, improving patient safety and quality of care, and sharing best practices in health benefits management with senior benefits, HR professionals, and medical directors from leading corporations. For more information, visit www.businessgrouphealth.org.
About Fidelity’s Benefits Consulting
Fidelity’s Benefits Consulting business helps mid to large-size employers nationwide assess the effectiveness of their benefits programs. The business provides a comprehensive approach to benefits design, strategy, funding, communications and delivery by looking at clients’ health care and retirement plans before diagnosing business solutions. The group’s specialties include retirement and health care plan consulting, custom data administration, compliance and employee communication. Benefits Consulting has offices in Boston, New York City, San Francisco, Chicago, Raleigh and Dallas.
About Fidelity Investments
Fidelity Investments is one of the world’s largest providers of financial services, with assets under administration of $4.0 trillion, including managed assets of $1.7 trillion, as of January 31, 2013. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.
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The National Business Group on Health is an independent entity and is not affiliated with Fidelity Investments.
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