Report Questions Effectiveness of Incentives for Workplace Wellness Programs

While offering incentives for participation in workplace wellness programs do increase participating, RAND researchers found that offering a comprehensive plan, as opposed to a limited one, is almost as effective at increasing employee uptake.

The researchers analyzed data from the 2012 RAND Employer Survey data set and healthcare claims and wellness program data for a larger employer. The goal was to determine which employer characteristics predict wellness program availability, program configuration, and incentive use, and how wellness program configurations related to employee participation.

“In spite of widespread access, the actual use of wellness programs by eligible employees and/or dependents remains limited,” the authors found.

In the report, 69% of employers with more than 50 employees offered a wellness program. Employer size was the most important predictor of whether a program was offered. Only one-third of small firms (50-100 employees) offered programs compared with 80% of firms will more than 1000 employees.

Employer size also predicted how the program was configured: limited, comprehensive, screening-focused, intervention-focused, or prevention-focused.

Of the firms with wellness programs, 75% offered incentives. Incentives, both monetary and nonmonetary, appeared to increase employee participation. Employers without incentives reported a median participation rate of only 20%. Those offering incentives reported a median participation rate of 40%. And when penalties or surcharges for not participating were used, the median participation rate was 73%.

However, among employers using comprehensive plans, participation was less sensitive to the choice of incentives or penalties. Overall median participation rate in workplace wellness programs, regardless of whether the employer used incentives, penalties, or no reward, was 40%. However, among comprehensive plans the median participation rate was 59%, regardless of incentive schemes.

RAND reported that there was no significant cost savings or reduction in healthcare utilization following participation in a workplace wellness lifestyle management program. In addition, the report noted that while lower cardiovascular event rates due to participation in a workplace wellness program did reduce costs, the savings did not offset the costs of participation.

“Our findings question whether employers’ enthusiasm for incentives, which have the unintended consequence of shifting cost to employees with poor health, is warranted,” the authors wrote in an issue brief.