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Penalties rival incentives as work health tactic

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in HR Management,Human Resources

Employers will use both carrots and sticks to keep workers healthier and stem the tide of higher health care costs, according to the 2013/2014 Towers Watson Staying@Work Survey.

The carrots: Financial rewards for employees who are achieving good numbers on tests that measure fitness and heart health, for example.

The sticks: Financial penalties for those who don’t, or who continue unhealthy behavior, such as smoking. Examples include higher health insurance premiums and deductibles.

The Staying@Work Survey found that employers and employees view workplace health initiatives differently. But employers pull the purse strings when it comes to most Americans’ health insurance, and they’re saying that employees hold the keys to health care cost containment.

According to Towers Watson researchers, who jointly conducted the survey with the nonprofit National Business Group on Health, 70% of employers say getting employees to take more responsibility for their health is the top priority of their health programs. Over the next several years, they’ll increasingly use financial rewards and penalties to hold workers more accountable and improve health outcomes.

In 2014, the survey found, almost four in 10 (36%) U.S. companies will use penalties such as higher health insurance premiums and deductibles for employees who do not participate in health management activities. In 2015-16, that number will jump to 61%.

Outcome-based incentives that reward or penalize employees based on tobacco use will grow from 54% next year to 71% in 2015-16. What’s more, rewards or penalties for other biometric outcomes (e.g., health-contingent targets such as body mass index, blood pressure or cholesterol level) will dramatically increase from 26% in 2014 to 68% in 2015-16.

Eighty-four percent of employers say they plan to increase support for workplace health and wellness programs over the next two years. The National Business Group on Health contends that companies that do so can expect to save more than $1,600 per employee per year in health care costs.

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