Incentives to keep employees healthy continue to grow

Almost daily there are news reports on the declining state of Americans’ health. From obesity to rising rates of clinical depression, the conditions have serious implications for employer costs. Overall health has declined for all income levels and the aging workforce does not explain the decline according to The State of Health in the American Workforce, released in September 2009.

Among the troublesome findings are 62% of employees are overweight or obese, a high incidence of pervasive sleep problems, rising stress levels, signs of clinical depression among one-third of the workforce and men’s health deteriorating more than women’s health since 2002. Such conditions impact work performance and have serious implications for health care costs as well as the cost and duration of Workers’ Comp claims.

Moreover, employee use of health care plans increased 42%; disability claims increased 30% and employee use of Employee Assistance Programs (EAP) rose 42% this year. The economy and the impact of downsizing have been taking an added toll on employee health.

In 2009, employers increased incentives to keep employees healthy, from an average of $204 in 2008 to $329 in 2009, according to a survey conducted by Vienna, Va.-based Health2 Resources, a health care research firm. Nearly two out of three U.S. companies offer programs to keep employees healthy, and 66% of those offering programs also use incentives, with many reporting a return on investment of more than $1 for each $1 spent.

Among the survey’s findings:

In 2009, incentives ranged from $1 per pound lost to more than $1,500 in annual premium reductions. The most commonly used incentive is premium reductions, followed by merchandise or tokens and gift cards.
More companies extending health and wellness or disease management programs to spouses and other family members.
Two out of three employers—large, midsize, and small—offer a health risk assessment to employees, and almost 75% offer incentives of up to $300 annually to take it.
Smoking cessation programs are the most popular, followed by weight management and physical activity programs.
Diabetes programs are the most popular disease management program offered.

Return on investment counts and 73% of the companies are measuring results, sharply up from 14% in 2007. Some 83% of those that have measured returns reported that the programs return better than 1:1 on their investment. More and more employers are rewarding goal achievement during and after health and wellness program completion.

Despite a tight economy, employers increasingly recognize that health and wellness programs coupled with policies fostering employee engagement and satisfactions such as supervisor support and work/life fit are needed to promote a healthy workforce and ultimately improve the bottom line.