BOSTON–Fidelity Investments(R), a leading service provider of employer benefits, in conjunction with the National Business Group on Health (NBGH), released a study1 today that found financial incentives have taken on greater importance in the drive to increase employee participation in health improvement programs. The survey, which looked at the behaviors and offerings of 147 mid- to large-size companies in various industries nationwide, is a follow-up to research Fidelity(R) and NBGH conducted in 2009.
According to the study, employers utilized several different types of incentives in 2010 to encourage employees to participate in health improvement programs. These included offering cash and gift cards and making additional contributions to health savings accounts, along with more punitive efforts such as reducing employer contributions to health plans if employees didn't engage in any programs. The incentives provided by employers averaged a total of $430 per employee in 2010, which was a 65% increase from $260 in 2009.
Half of all companies that provided such incentives in 2010 also offered them to dependents of employees, at an average value of $420. A small number of companies (12%) utilized negative incentives to encourage participation (reducing employer contributions to health plans for those not participating). More employers (62%) offered incentives last year than in 2009 (57%).
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"Employers know that a healthier workforce is more productive in the long term," said Sunit Patel, senior vice president of Fidelity's Benefits Consulting business, which commissioned the study with NBGH. "Wellness programs in the past have typically had modest impact because of low participation rates, but our study indicated that incentives are starting to make a real difference in employee interest and engagement."
According to the research, the majority of employers surveyed (56%) agreed that incentive-based programs had a better than expected success rate at increasing employee participation.
In exchange for incentives, employees participated in a variety of wellness programs in four main categories: health-risk management (e.g., on-site flu shots); lifestyle management (e.g., smoking cessation programs); condition management (e.g., nurse phone lines) and communication/education (e.g., company intranet wellness websites).
Excluding Incentives, Marginal Funding Increases Seen in Wellness Programs
Excluding incentives, which represented the largest increase in spending last year, the study found that the average employer spent just $154 per employee on health improvement programs vs. $108 in 2009.
Condition management programs (such as monitoring diabetes treatment) consumed the majority (41%) of the $154 spend, but that was a decline from 43% in 2009. Health-risk management programs (such as health fairs) experienced an increase in spending to 20% in 2010 from 15% in 2009. Lifestyle management programs (such as stress management) received virtually the same spend (29%) in 2010 as the prior year (30%).
"Growing numbers of employers nationwide recognize the importance of having a healthy workforce and its link to improving productivity and reducing rising health care costs," said Helen Darling, president and CEO of the National Business Group on Health. "We believe strongly that the various wellness initiatives that employers are undertaking will have long-lasting positive results for employers, workers and their families."
Employers Increasing Number of Wellness Programs
According to the survey, seven out of 10 (74%) employers offered 19 or more health improvement programs in 2010 and that number is expected to grow. In 2010, half (50 percent) of all employers added one new wellness program to their offerings and in 2011, 63% of employers plan to do the same.
Health-risk management programs (such as biometric testing) will experience the most growth, with almost four out of 10 (39%) employers planning to add such a program. About one in three companies (32%) will add lifestyle management programs (such as preventive care reminders) and roughly one in three firms (30%) will add communication/education management programs (such as health and wellness newsletters).
Methodology
Data for the survey was collected online between September 20, 2010 and October 29, 2010 by the National Business Group on Health in conjunction with Fidelity and is based on responses from a national sample of 147 companies from numerous industries including transportation, health care, technology, entertainment, consumer products, retail and energy production. The sizes of the companies spanned a broad range, from 1,000 employees to 100,000 employees. The results of this survey may not be representative of all companies meeting the same criteria as those surveyed for this study.
About the National Business Group on Health
The National Business Group on Health is the nation's only non-profit, membership organization of large employers devoted exclusively to finding innovative and forward-thinking solutions to their most important health care and related benefits issues and to being the voice for large employers on national health care issues. The Business Group, whose 312 members include 65 of the Fortune 100, identifies, develops and shares best practices in health benefits, disability, health and productivity, related paid time off and work/life balance issues. Business Group members provide health coverage for more than 55 million U.S. workers, retirees and their families. For more information, visit www.businessgrouphealth.org.
About Fidelity's Benefits Consulting
Fidelity's Benefits Consulting business helps mid to large-size employers nationwide assess the effectiveness of their benefits programs. The business provides a holistic approach to benefits design, strategy, funding, communications and delivery by looking at clients' health care and retirement plans before diagnosing business solutions. The group's specialties include retirement and health care plan consulting, custom data administration, compliance and employee communication. Benefits Consulting has offices in Boston, New York City, San Francisco, Chicago, Raleigh, Dallas and Merrimack, N.H.
About Fidelity Investments
Fidelity Investments is one of the world's largest providers of financial services, with assets under administration of nearly $3.5 trillion, including managed assets of $1.6 trillion, as of December 31, 2010. Founded in 1946, the firm is a leading provider of investment management, retirement planning, portfolio guidance, brokerage, benefits outsourcing and many other financial products and services to more than 20 million individuals and institutions, as well as through 5,000 financial intermediary firms. For more information about Fidelity Investments, visit www.fidelity.com.
Fidelity, Fidelity Investments, and Fidelity Investments and the Pyramid Design logo are registered service marks of FMR LLC.
The National Business Group on Health is an independent entity and is not affiliated with Fidelity Investments.
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1 Survey was conducted online by NBGH in conjunction with Fidelity from September 20, 2010 to October 29, 2010. 147 employers are included in the responses. Data was collected by NBGH.
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