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Financial rewards for employee healthy behavior

Health Factors: Diet & Exercise
Decision Makers: Employers & Businesses State Government Healthcare Professionals & Advocates
Evidence Rating: Some Evidence
Population Reach: 50-99% of WI's population
Impact on Disparities: Likely to increase disparities

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Description

Employers can offer payments, vouchers, credits toward health insurance premiums, or other financial rewards to encourage employees to lose weight, eat more healthily, quit smoking, engage in physical activity or other healthy behaviors. Employees may earn these rewards for joining health programs, engaging in selected activities, or meeting physical standards (Sutherland 2008).

Expected Beneficial Outcomes

Improved attainment of short-term health goals
Improved weight status
Reduced employer health insurance costs
Reduced absenteeism

Evidence of Effectiveness

There is some evidence that offering financial rewards for healthy behavior helps employees reach short-term health goals (John 2011, Volpp 2008, Cawley 2011a, O'Donnell 2012). Additional evidence is needed to confirm long-term effects (O'Donnell 2012, Paul-Ebhohimhen 2008).

Rewards increase program participation and can help employees reach short-term health goals in some circumstances (O'Donnell 2012). Workplace interventions offering financial rewards for weight loss can result in modest weight loss after one year, although such programs often have high attrition rates (Cawley 2011a). Financial incentives can encourage more weight loss than program participation without incentives (John 2011, Volpp 2008). Effects appear strongest for larger rewards and rewards delivered soon after participants complete the target behaviors (Marteau 2009).

Poorly constructed programs, however, may encourage gaming or unhealthy behavior (NIHCR-Tu 2010), and can increase disparities in health care coverage if they penalize disadvantaged persons less able to reach health goals (Volk 2012). Financial incentives may also undermine motivation to continue healthy behaviors once rewards end (Marteau 2009). Experts therefore suggest pairing rewards with health programs that encourage participation, progress towards health goals, and lifestyle change (Volk 2012).

Workplace wellness initiatives that include financial rewards for healthy behavior can generate cost savings; savings result from reduced absenteeism, lower use of health care services, or reduced workers compensation and disability claims, and generally begin two or more years after implementation (Volk 2012).

Implementation

United States

As of 2014, employers may reimburse employees up to 30% of the cost of their coverage if they reach defined health targets. The Health Insurance Portability and Accountability Act (HIPAA) requires that employers offer reasonable alternatives for employees medically unable to reach those targets (Volk 2012).

Wisconsin

Wisconsin law protects employers that offer wellness incentives from charges of discrimination as long as wellness programs conform to HIPAA regulations (Volk 2012).

Implementation Resources

CDC-WHP - Centers for Disease Control and Prevention (CDC). Workplace health promotion (WHP): Toolkit on how to design, implement, and evaluate effective workplace health programs. Accessed on December 10, 2015
O'Donnell 2012 - O’Donnell MP. Financial incentives for workplace health promotion: What is equitable, what is sustainable, and what drives healthy behaviors? American Journal of Health Promotion. 2012;26(5):iv–vii. Accessed on March 14, 2016

Citations - Description

Sutherland 2008* - Sutherland K, Christianson JB, Leatherman S. Impact of targeted financial incentives on personal health behavior: A review of the literature. Medical Care Research and Review. 2008;65(6 Suppl):36S–78S. Accessed on November 9, 2015

Citations - Evidence

Cawley 2011a - Cawley J, Price JA. Economic aspects of obesity, Chapter 4: Outcomes in a program that offers financial rewards for weight loss. In: Grossman M, Mocan NH, eds. Economic Aspects of Obesity. Chicago: University of Chicago Press; 2011:91-126. Accessed on November 27, 2015
John 2011* - John LK, Loewenstein G, Troxel AB, et al. Financial incentives for extended weight loss: A randomized, controlled trial. Journal of General Internal Medicine. 2011;26(6):621–6. Accessed on March 3, 2016
Marteau 2009* - Marteau TM, Ashcroft RE, Oliver A. Using financial incentives to achieve healthy behaviour. BMJ. 2009;338:b1415. Accessed on March 2, 2016
NIHCR-Tu 2010 - Tu HT, Mayrell RC. Employer wellness initiatives grow, but effectiveness varies widely. Washington, DC: National Institute for Health Care Reform (NIHCR); 2010. Issue Brief No. 1. Accessed on March 1, 2016
O'Donnell 2012 - O’Donnell MP. Financial incentives for workplace health promotion: What is equitable, what is sustainable, and what drives healthy behaviors? American Journal of Health Promotion. 2012;26(5):iv–vii. Accessed on March 14, 2016
Paul-Ebhohimhen 2008* - Paul-Ebhohimhen V, Avenell A. Systematic review of the use of financial incentives in treatments for obesity and overweight. Obesity Reviews. 2008;9(4):355–67. Accessed on March 14, 2016
Volk 2012 - Volk J, Corlette S. Premium incentives to drive wellness in the workplace: A review of the issues and recommendations for policymakers. Washington, DC: Georgetown Health Policy Institute (HPI), Georgetown University; 2012. Accessed on February 5, 2016
Volpp 2008 - Volpp KG, John LK, Troxel AB, et al. Financial incentive - Based approaches for weight loss: A randomized trial. Journal of the American Medical Association. 2008;300(22):2631–7. Accessed on November 19, 2015

Citations - Implementation

Volk 2012 - Volk J, Corlette S. Premium incentives to drive wellness in the workplace: A review of the issues and recommendations for policymakers. Washington, DC: Georgetown Health Policy Institute (HPI), Georgetown University; 2012. Accessed on February 5, 2016

Page Last Updated

January 10, 2014

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