Employers Raising the Bar on Financial Incentives to Improve Worker Health, National Business Group on Health/Towers Watson Survey Finds

NEW YORK and WASHINGTON, March 11 /PRNewswire-FirstCall/ -- While employers remain committed to offering health and productivity programs, they are frustrated by the inability of many workers to change their health habits. In an effort to encourage healthy behaviors, a growing number of employers are tightening their requirements for workers to receive financial incentives, according to a survey conducted by Towers Watson (NYSE, Nasdaq: TW), a global professional services company, and the National Business Group on Health (NBGH), a nonprofit association of large U.S. employers.

Currently, more than half (53%) of large employers offer financial incentives to workers who enroll in health engagement activities, such as weight management or smoking cessation programs. But, for many employers, participation alone is no longer enough to earn an incentive. Now, more than one-third of employers (37%) reward only those workers who meet the company's requirements for completion of a health engagement activity, and almost one-third (29%) only reward members who participate in multiple activities, according to the 15th Annual NBGH/Towers Watson Employer Survey on Purchasing Value in Health Care. Still, most employers (93%) have no plans to eliminate their health promotion programs, and 83% have no plans to cancel or delay adding new ones.

"Employers are frustrated by their employees' low use of expensive health improvement programs," said Ted Nussbaum, senior consultant at Towers Watson. "As employers continue to empower workers to be more health focused, they are beginning to target and reward those workers who demonstrate a real commitment to making positive lifestyle changes."

This year's survey also found that employers demonstrate dramatic differences in their ability to keep health care cost increases in check. The survey identified a group of "consistent performing" companies that have successfully held cost increases below the median trend for the last four years. In fact, these consistent performers experienced a median cost increase of just 2.1% over the last four years compared with 6.8% for all companies. These companies separate themselves from poorer performing companies in five areas: appropriate financial incentives, effective information delivery, metrics and evidence, quality care, and health and productivity. Consistent performers spent $6,536 per employee on health care benefits in 2009 -- nearly $1,200 less per employee than for all survey respondents.  

"Employers can learn from the companies that consistently hold down health costs year after year," said Ron Fontanetta, a senior consultant at Towers Watson. "These employers are doing more than just making temporary changes to individual programs. Consistent performing companies offer a wide array of integrated health initiatives and appropriate financial incentives. Over time, the savings are significant."

Interest in consumer-directed health plans (CDHPs) continues to expand among employers and their workers. Just over half (54%) of companies now offer a CDHP, and that number is expected to grow to 61% in 2011. Nearly half (46%) of companies that offer a CDHP report at least 20% of their workers enrolled, an increase of nearly 70% in five years. Companies with higher levels of CDHP enrollment also report lower costs. Those with at least 50% of their workers enrolled in a CDHP report average annual costs per employee of nearly $1,000 less than at non-CDHP companies. Similarly, nearly 60% of survey respondents indicate their workers pay premiums that are at least 30% less than those for traditional copay plans.

"Employers and their workers face a challenging road ahead together," said Helen Darling, president of the National Business Group on Health. "Those companies most effective at empowering their workers to be engaged consumers of care will find greater success at keeping costs low and likely be rewarded with a healthier, more productive workforce -- an effort that has never been more important than it is right now."  

Other findings include:

• In 2010, 38% of companies will offer a health savings account (HSA), with an additional 7% expected to do so in 2011.
• In 2010, 46% of employers will provide coverage for use of retail clinics, up from 36% in 2009.
• In 2010, 57% of employers will encourage plans and providers to provide workers with access to online medical records, up from 54% in 2009.

Click here to download the 15th Annual NBGH/Towers Watson Employer Survey on Purchasing Value in Health Care.

About the 15th Annual NBGH/Towers Watson Employer Survey on Purchasing Value in Health Care

The 15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care was conducted from November 2009 through January 2010 with 507 employers of 1,000 or more employees that collectively employ 11.5 million workers.

About the National Business Group on Health

The National Business Group on Health is a non-profit membership organization of more than 280 members, including 60 of the Fortune 100. The National Business Group on Health is devoted to providing practical solutions to its employer-members' most important health care problems and serving as the voice for large employers on national health care issues and public policy. Its members purchase health and disability benefits for over 55 million people. For more information, visit www.businessgrouphealth.org.

About Towers Watson

Towers Watson (NYSE, Nasdaq: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers solutions in the areas of employee benefits, talent management, rewards, and risk and capital management. Towers Watson has 14,000 associates around the world and is located on the web at towerswatson.com.

SOURCE Towers Watson