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Employers Eye Wellness Program Disincentives

William Jordan William Jordan , 9/15/2016
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Although disincentives are playing a greater role alongside incentives in employee wellness plans, it makes sense to use this approach with caution.

A recent nationwide study by Aon Hewitt found that, 83% of businesses surveyed offer incentives with their wellness plans, while 53% plan to add "sticks" to their programs within the next three to five years.

Experts often recommend introducing financial disincentives in the third year of a program, once employees become accustomed to the plan and may need a negative nudge to keep them moving forward. A sampling of Health Care Service Corporation (HCSC) wellness programs in four states shows that disincentives can improve employee participation nearly four times more than incentives.

However, not everyone is jumping on this bandwagon. For example, UnitedHealth Group decided not to use disincentives in a musculoskeletal pilot wellness program, says spokeswoman Patti Walsh, because "we don't want to say, 'if you don't do this we won't pay your claim'." According to wellness consultant Cyndy Nayer, incentives provide an emotional reward for positive health activity as the brain floods with the feel-good hormone dopamine, while there's no such reinforcement with disincentives.

Critical observation of your company's employment culture is essential. Says Tom Meier, HCSC vice president of product development, "You've got to select relevant activities and rewards," "It's highly effective for an employer to look at their own population and ask: 'What am I trying to solve for?'"

As Meier see it, employees who don't become engaged in wellness programs aren't really getting a disincentive as much as they're just not getting the reward. He believes that this type of low-impact penalty could benefit employers who hesitate to use disciplinary "sticks" with their wellness program.