New Employer Survey Finds Growing Use of Outcomes-Based Incentives, Majority Using Either Carrot or Stick to Motivate Healthy Employee Behaviors

41% percent are using or planning to use outcomes-based incentives, while 37% offer both incentives and disincentives

CHICAGO, May 7, 2013 /PRNewswire/ -- A new national survey of employer views on the use of employee health incentives (rewards) and disincentives (penalties), found that of those companies responding, 82% offer some form of incentives and/or disincentives. There is also a growing interest in outcomes-based incentive strategies (i.e. reaching targeted biometric goals). The study was conducted by the Midwest Business Group on Health (MBGH), one of the nation's leading non-profit business groups of large, self-insured public and private employers.

Almost 100 employers completed the online survey conducted in April 2013. The responses represented businesses from a variety of industries and sizes and a summary of the findings is available here.

"Most employers find that unless they offer some form of incentive, employees and dependents often don't participate in programs that are meant to prevent and reduce chronic disease, resulting in millions of benefits dollars being wasted," said Larry Boress, MBGH president and CEO. "Our national survey found over 80% of responding employers are using some form of incentives, with 41% using or planning to use outcomes-based incentive to increase engagement and participation in employer-sponsored programs."

Other key findings from the responding employers included:

Outcomes-based Incentives:

• Employers responded that 13% are already offering outcomes-based incentives and 28% are planning to launch programs over the next one to two years, while 40% indicated interest, but need more information.
• Of those currently offering outcomes-based programs, 54% tie incentives to both outcomes-based measures (i.e. meeting specific targets such as BMI of 25) and improvements in outcomes (i.e. percentage decrease in BMI), versus one or the other.
• Onsite clinical screening programs are used by 94% of employers as the way to capture biometrics with the top measurements being:  86% blood pressure, 81% BMI, 73% cholesterol, 68% glucose, and A1c and waist circumference tied at 59% each.
• Employers said that 18% are experiencing participation levels of over 90% for outcomes-based programs; while the majority (60%) is experiencing participating levels of 40 to 80 percent.
• Employers indicate that 98% of employee feedback is "somewhat positive" to "very positive."
• Degree of difficulty is notable with 95% of employers finding some level of difficulty in implementing an outcomes-based program.

Offering incentives/disincentives:

• Of the 18% of employers who reported not offering incentives or disincentives, 53% indicated the reason was that it was not part of their corporate culture and 47% are not sure it works.
• For those employers offering incentives, 62% reduce premiums, 38% use gift cards and 35% offer merchandise.
• Of those employers that use disincentives, 43% increase employee share of premiums for non-compliance and 14% have higher plan deductibles or out of pocket fees.
• Activities that most employers' incented included biometric screenings (70%) and health risk assessments (78%), with the greatest disincentive (78%) being used for tobacco use.
• The monetary value of incentives programs varies widely, with $250-500 for 27% of those offering programs, $100-250 for 22% of employers and $500-1,000 for another 22% of firms.
• Employers indicated that 71% found their incentive strategy was "very successful" or "successful" and 45% viewed their disincentive strategy as "very successful" or "successful."
• With the Affordable Care Act (ACA) in 2014 allowing employers to increase their incentives from 20 to 30 percent of total coverage, almost 67% said they are "very likely" or "likely" to do so and almost 36% are "not very likely" or "not likely." For tobacco users, the ACA allows employers to increase the value from 20 to 50 percent, with employers indicating 48% "very likely" to "likely" and 52% "not very likely" to "likely."

"Our program has helped employees track positive health improvements year after year and we've found that when they see these numbers, it helps them stay on track," said John Neuberger, director of client partnerships for Quad/Graphics.

About Midwest Business Group on Health
With more than 120 member organizations, MBGH is one of the nation's leading non-profit business groups of large, self-insured public and private employers serving as a catalyst for community initiatives to improve the quality, safety and cost-effectiveness of the health care delivery system. MBGH is an essential resource to support employers in effectively managing their health benefits through high-quality education, research, networking and benchmarking. MBGH is a founding member of the National Business Coalition on Health.

SOURCE Midwest Business Group on Health