A new survey by Hewitt Associates demonstrates employers' growing commitment to penalize workers for unhealthy behaviors.
In Hewitt's annual health care trends survey of nearly 600 large U.S. employers, 47% say they either already use or plan to use financial penalties over the next three to five years for employees who do not participate in certain health improvement programs.
Of those companies using or planning to use penalties, 81% say they will do so through higher premiums. Increasing deductibles (17%) and out-of-pocket expenses (17%) were also cited as possible penalties.
When asked what types of behaviors or programs they would penalize, the top behavors were smoking (64%), not participating in disease management/lifestyle behavior programs (50%) and not participating in biometric screenings (45%).
"The economy and continued escalation of health care costs have driven many employers to be a little more bold and demanding of their employees, making disincentives an increasingly attractive option," says Cathy Tripp, a principal in Hewitt's health management practice. "As companies learn more about their workforce, they're realizing that some people may be more motivated to take action if they risk losing $100 versus gaining $100. They key for each employer is to find the right mix of strategies and plan designs that will motivate employees to be healthier, but not go so far as to drive the wrong behaviors."
The sharper focus on penalties stems from concerns about rising health care costs. Ninety-five percent of employers say cost is a to[ business issue, and 70% indicate that "promoting employee accountability" is a key component of their health care strategy. For the second year in a row, keeping employees healthy is the top workforce issue.
Financial incentives
On the other side of the carrot-and-stick equation, the Hewitt study also quantified employers continued - and growing - use of financial incentives to increase employee participation in health and wellness programs.
For example, 58% now offer employees incentives to participate in health and wellness programs; of those employers, 24% also offer them to employees' spouses and dependents. Two of the most frequently used "carrots" showed large jumps in usage compared with last year:
- 63% offer cash incentives for completing a health risk assessment, up from 35% in 2009.
- 37% offer cash incentives for participating in health imporvement and wellness programs, up from 29% in 2009.
"It's important for employers to tie incentives to steps that require actual behavior change," says Jim Winkler, leader of Hewitt's U.S. health care practice. "Giving a diabetic $100 to complete a health risk questionnaire may identify that diabetic as high risk, but it won't do much to ensure he or she is taking steps to exercise, eat properly and get preventative care. Employers with programs that require workers to demonstrate these sustainable behaviors before receiving an incentive will have a more meaningful impact than those that base the reward on one-time actions, such as signing up for a disease management program."
