Companies offer workers more incentives for health changes

New York TimesMarch 30, 2013 

Employers are increasingly trying to lower health care costs by using incentives to persuade workers to make better lifestyle choices, a new survey shows, but what remains less clear is whether a reward is better than a punishment – or whether the programs work at all.

The survey, of 800 large and midsize employers conducted by the human-resources consulting firm Aon Hewitt, found that the vast majority of companies, or 79 percent, use rewards like lower insurance premiums to try to nudge employees to improve their health.

But increasingly, the survey found, employers are taking the programs a step further, by penalizing employees who do not make healthy choices and linking incentives to measurable results.

“Employers are feeling the need to intensify their efforts to create an environment where people feel they are responsible for their own health,” said Jim Winkler, chief innovation officer for health care at Aon Hewitt.

While a little more than half, or 56 percent, of the companies using incentives required employees to sign up for programs like health coaching or completing a questionnaire, 24 percent tied their incentives to progress on measures like a person’s blood pressure or body mass index. And the survey found that more than two-thirds of companies said they were considering taking similar steps in the future.

Programs that seek to impose consequences on workers by charging them higher premiums or requiring them to pay a surcharge for failing to take steps to lose weight or quit smoking have come under criticism by those who have argued that the policies are invasive and can punish people for health problems that are not always easy to fix.

Although some employees have sought to challenge such policies in federal court, arguing that they are a violation of privacy or of the Americans With Disabilities Act, the cases have so far failed to gain traction.

The programs are likely to increase in popularity in the years ahead. That’s partly because as part of the new health care law, beginning in 2014 employers will be able to use as much as 30 percent of a worker’s health care premiums on incentives programs, from 20 percent previously.

CVS Caremark, the large drugstore chain and pharmacy benefit manager, recently said it would require its 200,000 employees to report their weight, blood sugar and cholesterol or be forced to pay an annual penalty of $600. It also will require that smokers try to quit. Several other major employers, including PepsiCo and Wal-Mart, have also adopted such policies.

While the popularity of workplace wellness programs appears to be on the rise, there is less evidence about whether they actually lower health care costs or make employees healthier. Programs that reward people for good behavior may be singling out those who were already practicing healthy habits, while those that penalize workers for bad behavior may be unfairly singling out the very people who need lower health care costs.

“These are really hard behaviors and decisions to move the needle on,” said Michelle Mello, a professor of law and public health at Harvard. She cautioned against drawing too many conclusions from the Aon Hewitt survey, because the companies that participated may have been more likely to offer workplace wellness programs than those that did not.

Aon Hewitt said the survey’s 20 percent response rate was typical for the industry and the companies who completed the survey were a representative sample.

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