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By Anne Field
In the effort to control health-care costs, an increasing number of companies are emphasizing the stick as well as the carrot.
That is, while more businesses are offering incentives to employees for engaging in healthy behavior, they're also penalizing workers who don't participate in health improvement programs.
That's according to a study by Hewitt Associates of about 600 large US companies representing more than 10 million employees. Nearly one-half (47 percent) of respondents either already use or plan to use financial penalties over the next three to five years for employees who don't participate in specific health and wellness programs. Of those companies using or planning to use penalties, 81 percent will do so through higher benefit premiums. Increasing deductibles (17 percent) and out-of-pocket expenses (17 percent) were also cited as possible penalties.
What type of programs and behaviors are we talking about? Smoking was the big one. Almost two-thirds (64 percent) of employers pointed to that as a behavior they'll penalize. Also, 50 percent cited not participating in disease management/lifestyle behavior programs and 45 percent point to not taking part in biometric screenings.
At the same time, a great many-58 percent-of employers offer incentives for good behavior, specifically, for participating in health and wellness programs. And 24 percent offer those incentives to spouses and/or family members. The incentives include cash for completing a health risk questionnaire-up to 63 percent of respondents compared to 35 percent the year before-and providing cash incentives for participating in health and wellness programs.
It's all about, in the words of the study, "promoting employee accountability." In fact, 75 percent of respondents said that's a key component of their strategy to hold down health costs. Clearly, operating at both ends of the spectrum-rewarding employees for good behavior and punishing them for being bad, and doing so with real financial incentives-is a smart way to attain that goal.
Whether it's enough to lower costs significantly has yet to be determined.
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