Wellness incentives, especially penalties, can increase employees’ participation in wellness programs but other factors play a considerable role as well, a study by the RAND Corp. indicates.
“The main finding is that, while incentives increase employee uptake among programs with limited services, offering a comprehensive program is almost as effective,” according to a RAND summary.
Workplace Wellness Programs: Services Offered, Participation, and Incentives, performed under contract with the U.S. Department of Labor, took a fresh look at data that RAND had gathered for the federally sponsored study that it issued in 2013 along with the HIPAA/Affordable Care Act wellness program rules. The new study also incorporates data obtained from a Fortune 100 employer that covers seven years and nearly 200,000 unique employees and dependents.
Program availability and incentives vary greatly by employer size, RAND Health found. “About 33 percent of the smallest firms (50 to 100 employees) and about 80 percent of the larger ones (more than 1,000 employees) had a wellness program,” the summary “research brief” explained. Of employers with wellness programs, “about 60 percent of the smallest employers and 90 percent of other employers used incentives, mostly monetary, to promote program uptake.”
Unsurprisingly, an employer’s size also was a major factor in the scope of wellness services offered. Of those with 50 to 100 employees, 70 percent had only a “limited” program, compared to 41 percent of employers with 101 to 1,000 employees and only 36 percent of employers with more than 1,000 employees.
Overall, incentives seemed to have a substantial effect on program participation. “Employers that did not use incentives reported lower participation rates — a median of just 20 percent,” according to the research brief. “Uptake appears to increase with the use of rewards, such as access to a higher-value health plan, with a median participation rate of 40 percent.” Penalties such as higher insurance contributions pushed this rate to an average of 73 percent.
However, incentives had less of an effect at employers with “comprehensive” programs, defined as those with extensive screening, lifestyle management and disease management services. These employers reported 52 percent participation even without incentives, 56 percent with rewards only and 71 percent with penalties. “Participation in these programs was less sensitive to choice of incentive scheme,” RAND noted.
Increasing the incentives was found to enhance their effect, but not drastically. “Employers offering rewards of more than $100, a common threshold, report participation rates of 51 percent, compared with 36 percent for those with smaller rewards,” the research brief indicated. “The same observation holds true for penalties.”
Thus, while incentives can enhance wellness program participation, “they are not a panacea,” RAND concluded. “Offering a rich, well-designed program is almost as effective at boosting employee participation rates as incentivizing employees to join more-limited ones.”
The full text of the survey report is available on DOL’s website.