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Wellness Programs and Incentives

By June 11, 2015Commentary

Wellness programs have become mainstream at the workplace and many have positive or negative incentives associated with them.  A Rand Corporation brief summarizes results of a survey regarding these programs, their design and the relationship of program and incentive design with participation rates.  (Rand Brief)  Overall the survey found that 69% of companies with offer 50 employees offered a wellness program and 75% of the programs included an incentive of some type.  Offering of wellness programs is strongly associated with firm size; 33% of the smallest companies (50 to 100 workers) and 80% of the largest ones (1000 or more employees) had a wellness program.  Larger employers were also more likely to have incentives associated with the wellness effort.  Main reasons given by small employers for not having a wellness program included financial resources and likely return, while the large employers cited lack of worker interest.  Since 36% of Americans work in companies with less than 100 employees, the low offer rate of wellness programs in that size employer means many people don’t have access to workplace health improvement efforts.

The Rand survey had three primary components for wellness programs:  screening for health risks; lifestyle management to reduce health risks and disease management for people with a chronic condition.  They divided the extent to which an employer offered combinations of these into five configurations:  limited, offered by 34% of firms; comprehensive, offered by 13%; screening focused, offered by 20%; intervention focused, offered by 21% and prevention focused offered by 12%.  Small employers who had wellness efforts were most likely to offer the limited configuration.  Employers with no incentives reported participation rates of around 20%.  Those with rewards had a median participation rate of 40%, while those with negative incentives had median participation rates of 73%.  Larger incentives, whether a reward or penalty, improved participation rates more than smaller ones.  But the design of the program also appeared to affect participation; companies offering comprehensive programs had participation rates of 59%, and incentive availability or composition did not appear to affect that rate much.

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