Wellness programs are on the rise, as employers try to encourage a healthier workforce, and financial incentives increasingly are being used to drive employee participation in these programs, recent surveys indicate. Most employers offering wellness initiatives agree that incentive-based programs had a better-than-expected success rate in increasing employee participation, according to a survey from Fidelity Investments, conducted with the National Business Group on Health. Almost two-thirds (62%) of the surveyed employers offered wellness incentives in 2010, and 56% of these said the incentives resulted in higher employee participation. The incentives offered- such as cash and gift cards, and additional contributions to health savings accounts-averaged $430 per employee in 2010, up from $260 in 2009. Half of the companies offering wellness incentives to employees also made the incentives available to dependents, at an average value of $420. Fewer firms-12%-used negative incentives, such as reducing the employer health plan contribution for employees choosing not to participate in a wellness initiative.

Wellness programs fell into four categories: health-risk management (such as on-site flu shots, health fairs and biometric testing); lifestyle management (smoking cessation, stress management and preventive care reminders); condition management (diabetes, hypertension or other chronic condition treatment monitoring); and communication/education (company wellness sites and health and wellness newsletters). Most employers offered a large number of wellness programs: 74% offered 19 or more health improvement programs in 2010, and that number is expected to grow, as 63% said they planned to add to their wellness roster in 2011.

Excluding the cost of financial incentives, the average employer spent just $154 per employee on wellness programs in 2010, up from $108 in 2009. For that price tag, employers expect to see a healthier workforce, which they hope will translate into lower health care costs, increased worker productivity and improved employee morale.

A separate survey from Towers Watson and the National Business Group on Health found some basis for the link between reduced health care spending and wellness initiatives. That survey identified within the employer respondents a group it termed "consistent performers" that had held health plan cost increases below the median for the last four years (a median cost increase of 2.1%, compared with 6.8% for the overall employer group, or nearly $1,200 less per employee in 2009 alone). The areas that separated these companies from others with higher health plan costs included appropriate financial incentives, effective information delivery, metrics and evidence, quality care, and health and productivity.

The Towers Watson survey also found that employers are beginning to tighten their requirements for receiving a wellness program financial incentive. While 55% of the firms surveyed offered financial incentives to workers who enroll in health engagement activities, for many of these employers participation alone no longer is enough to earn the reward: 37% paid incentives only to employees who met the company's requirements for completion of a health engagement activity, and 29% only rewarded those who participated in multiple activities.

Wellness programs and financial incentives for participation can have a place in any company, regardless of budget constraints. Many types of wellness programs are already a part of most health insurer's plans, and even seemingly small incentives-such as gift cards or a little added contribution to a spending account-can help to drive employee behavior. With the benefits of a healthier workforce as a potential result, a little creativity, brainstorming and expense is well worth the effort.

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