More Employers Offer Workers Financial Incentives For Healthy Behavior

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Healthy Behavior

With continuing pressure to control health care costs, more companies plan to offer financial incentives to reward workers who adopt healthy lifestyles, according to a new survey by Watson Wyatt, a leading global consulting firm, and the National Business Group on Health, a non-profit association of 285 large employers. Those employers best controlling costs and increasing productivity are integrating a broad array of health management programs.

Nearly half (46 percent) of employers surveyed currently 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 2007/2008 [email protected] survey. A total of 355 large employers participated in the survey.

The survey also found that companies with effective health and productivity programs demonstrate 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). Additionally, companies with highly effective health and productivity programs have cost increases that are five times lower for sick leave; four and one- half times lower for long-term disability; four times lower for short-term disability; and three and one-half times lower for general health coverage.

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"With few options left, companies are putting significant emphasis on improving the health and productivity of their workforce" said Shelly Wolff, national practice leader for health and productivity at Watson Wyatt. "Global competition and pressure for greater efficiency are causing employers to seek new ways to help manage benefit costs and increase worker output. 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."

The survey found that more companies are planning to connect employee health to company goals. Almost one-third of employers (29 percent) currently link health and productivity programs to their broader initiatives, or plan to in 2008. Another 26 percent plan to do so in 2009. Employers are also implementing various programs to engage employees in managing their own health.

Yet, while both companies and their workers say that a healthy workforce is a priority, accountability remains low. Although 79 percent of companies think employees should be held accountable for improving and maintaining their own health, only 4 percent actually are taking action on this issue. Similarly, 68 percent believe that managers should be responsible for workforce productivity, yet only 13 percent are holding managers accountable.

"The survey results confirm that successful employers are more likely to provide tools to support health improvement, promote emotional health, educate employees on safety at work, use positive economic incentives, and involve senior management in promoting health and productivity. It's a very inspiring message," said Helen Darling, president of the National Business Group on Health.

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