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Businesses turn to incentives to improve employee health Posted: August 20th, 2012

By Maryalene LaPonsie

Maryalene LaPonsie has been writing professionally for more than a decade on topics including education, insurance and personal finance. She holds a Bachelor's Degree in Political Science from Western Michigan University.

As businesses grapple with rising health insurance rates and the prevalence of chronic conditions among employees, many are turning to incentives to spur their workforce to remain healthy. Aon Hewitt, a human resources solutions firm, surveyed nearly 2,000 U.S. employers and found the vast majority use some type of incentive program.

Surge in use of monetary incentives for group health insurance members

Incentive programs range from encouraging employees to take health screenings to rewarding them for dropping unhealthy habits such as smoking. According to the Aon Hewitt survey, the following are some of the most common programs and the percentage of companies offering incentives for employee participation:

  • Health risk questionnaires: 84 percent
  • Biometric screenings: 64 percent
  • Lifestyle modification programs: 58 percent
  • Health improvement and wellness programs: 51 percent

While incentives can take many forms, employers are increasingly using money to motivate their workforce to participate in these programs.

In 2012, 59 percent of employers offered monetary incentives. That's up from 37 percent in 2011. In addition, the number of businesses offering monetary incentives for participating in health management programs for specific diseases and conditions nearly tripled in the past year. In 2011, only 17 percent of employers surveyed offered monetary incentives for these programs. By 2012, that number had jumped to 54 percent.

Employers looking for results among insured workers

Although many employers are simply rewarding participation in programs, an increasing number are also looking for results.

"Programs and tools like, health screening questionnaires, and biometric screenings can make employees more aware of their health status and of the opportunities to improve their health, but alone they won't move the needle when it comes to health improvement and mitigating cost," said Jim Winkler, chief innovation officer for Health & Benefits at Aon Hewitt, in a statement.

Instead, employers are looking for ways not only to raise awareness, but also to encourage employees to take action and improve their health. This, in turn, may help stabilize or reduce company health insurance rates.

To that end, more employers are turning to value-based insurance designs (VBID) within their health insurance plans. In the Aon Hewitt survey, 46 percent of companies say they have these designs, which offer the opportunity for employees to receive enhanced benefits. One-third of the employers offering VBID medical insurance plans require the completion of a health screening questionnaire or participation in a disease management or smoking cessation program.