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Businesses Become More Aggressive

Originally posted by United Benefit Advisors

Given that the potential benefits of wellness programs include reigning in runaway health care costs, decreasing turnover and improving productivity, it’s no surprise that companies are eager to increase employee participation.

The most popular way of raising participation rates is through incentives. This is primarily done through rewards and prizes, but increasingly companies are using penalties as a way of spurring employees to take part in wellness programs.

A recent survey by Fidelity Investments and the National Business Group on Health found that nearly 90 percent of employers are offering wellness incentives, rewards or prizes, up from 57 percent in 2009. Reported in The Wall Street Journal, the study also found the perks to be worth more: $521 per employee, compared with $260 four years ago.

As Helen Darling, president and CEO of the Washington-based National Business Group on Health, told Business Insurance, “What a lot of employers have found is that positive rewards generally aren’t that effective unless they involve a fair amount of money, depending on the pay level of the employees. Where the rewards probably had worked initially, employers that have been doing this for a while are deciding that if they wanted to get people’s attention and to get them into the program, a penalty or consequence is going to be more effective.”

Penalties, however, don’t come without risk, including negative reactions from employees. To minimize potential dissatisfaction, companies must communicate clearly and regularly about their wellness programs and goals, ensuring that penalties don’t come as a surprise to employees.