A job with the> Cleveland Clinic comes with some pretty nice perks. Among other things, employees of the Ohio-based medical and research center get to use fitness centers on the clinic s campuses for free, and can take Weight Watchers and yoga classes at no cost. The reward for hitting the gym 10 times a month for 10 months? $100. Ditto for those who lose 10% of their weight.
The payoff sounds good especially for the Clinic, which hopes to lower its expenses by pushing workers to get fit. And the tactic is increasingly popular with employers who are struggling to keep up with premiums for employees that have increased 115% over the last decade, according to Kaiser Family Foundation data. Indeed, more than half of employers expect to introduce a wellness program next year or expand on existing ones, and 34% will introduce or enhance financial incentives for those programs, according to Aon Consulting, an employee benefits consulting firm.
Yet the jury is out on the long-term effectiveness of these programs. Wellness initiatives may result in healthier workers, but they might also end up costing employers more than they d save, says Louise Russell, a research professor at Rutgers University s Institute for Health who has studied the cost-effectiveness of preventive health measures. When you look at the fact that you have to treat many people for many years in order to prevent that one heart attack, you understand that costs add up and are more than savings, Russell says.
What s more, the literature on the use of financial incentives to motivate behavior change isn t well developed yet, says Laura Linnan, an associate professor at the University of North Carolina s Gillings School of Global Public Health who studies the use of incentives in modifying heath behavior. Most are simple case studies, where a company has tried something it might have worked for them, but it s only a case of one. It s not something you can generalize to all employers, she says.
So, should employees sign up or not? If you re unsure your company offers such a program, check with human resources or your insurer.
The Way It Works
In a typical wellness program, employees take a health assessment, answering a broad range of questions about their nutrition, smoking, sleeping, stress levels, alcohol intake, as well as their family history with asthma, heart disease and diabetes.
The worker then gets a report and a health score showing where he or she is falling short, where there s room for improvement, and how to reduce risk. The next step is the offer of access to an instructional program that would help them, say, stop smoking, manage stress or improve their diet.
The incentives companies use to drive parrticipation in their health programs take various forms. These can range from retailer gift cards to relief on their health-care premiums.
At Prudential, the financial-services company based in Newark, N.J., for example, employees get $150 (taxed as regular wages) if they complete a health risk assessment. Prudential encourages employees to exercise and offers discounts to area fitness centers. For example, employees who wish to join one of the New York Sports Club sites can save $20 a month off the passport membership with a one-year contract.
Employees at Paychex, a Rochester, N.Y.-based payroll and human-resources provider, can earn up to $300 cash each year by accumulating points for doing certain physical activities. They earn 10 points for getting a flu shot (available on site, free), 25 points for taking a fitness class, and 50 points for participating in three phone calls with a health coach.
And Paychex employees who meet three health requirements get something better than cash: access to the richer medical benefits package, one of which has a $150 individual deductible, 10% co-insurance and an annual out-of-pocket maximum of $500. Those who don t meet the requirements go into a higher cost-sharing plan, which includes a $300 deductible, with 20% co-insurance and a $750 out-of-pocket maximum, says Jake Flaitz, director of benefits at Paychex, which implemented its program last year.
Don t Want to Get Fit? Pay a Penalty
Some employers are taking the opposite approach. Instead of goading workers into healthy habits with carrots, the emphasis is on the stick.
This year, for instance, North Carolina enacted legislation that will effectively penalize state employees for not complying with certain health guidelines by putting them in a more expensive insurance plan.
The policy focuses on the twin health issues of smoking and obesity. Beginning in July 2010, state health plan members who do not use tobacco have access to a less-expensive plan (where the state covers more of patients out-of-pocket medical costs). Members who don t want to participate in the program will remain in the pricier plan, where they d end up paying about $40 more per month vs. the cheaper plan, says Linda McCrudden, a spokeswoman for North Carolina State Health Plan.
The same goes for employees considered obese (based on body mass index) beginning in July 2011.
Alabama approved a similar plan last year: State employees must undergo health screenings by January 2010. Those found to be obese (based on BMI) have a year to seek treatment. If they don t take action or meet certain goals, they ll get charged $25 a month starting in 2011. Alabama already charges state employees who smoke $25 a month to offset the alleged higher costs of those workers health care.