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Employers offer financial incentives for healthy behavior

With pressure to control health care costs mounting, more companies plan to offer financial incentives to reward workers who adopt healthy lifestyles, according to the 2007–2008 Staying@Work survey co-sponsored by Watson Wyatt, a global consulting firm, and the National Business Group on Health, a not-for-profit association of 285 large companies.

Nearly half of employers surveyed offer financial incentives to encourage workers to monitor and improve their health or plan to offer incentives next year. By 2009, that number is expected to surpass 70 percent, according to the survey.

The payoff for this healthy behavior isn’t just an altruistic one, according to the survey. Companies with effective health and productivity programs also show superior performance — they achieve 20 percent more revenue per employee, have 16.1 percent higher market value, and deliver 57 percent higher shareholder returns (from 2004 to 2006). Companies with health and productivity programs have lower expenses, too, for sick leave, long-term disability, short-term disability, and general health coverage. There is no way to know how much of the effect is from generally good overall management and how much is from use of the health and productivity programs.

Prevalence of healthy behavior incentives in the workplace

“Increasingly, companies are looking at the health of their workers as the new growth engine to stave off health care inflation and keep employees on the job and productive,” says Shelly Wolff, national practice leader for health and productivity at Watson Wyatt. The 2007–2008 Staying@Work survey found more and more companies are planning to connect employee health to company goals.

Source: 2007–2008 Staying@Work survey, Watson Wyatt

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