Corporate Wellness Incentives Spending to Increase

Corporate employers plan to spend an average of $594 per employee on wellness-based incentives within their health care programs this year, according to a new employer survey conducted jointly by Fidelity Investments and the National Business Group on Health (NBGH). This marks an increase of 15% from the average of $521 reported for 2013, and is more than double the average of $260 reported in 2009. The largest increase was among companies with fewer than 5,000 employees, where the per employee average climbed to $595, one-third higher than the average of $444 per employee in 2013.

According to Fidelity, the aim of the survey is to analyze the growth of corporate health improvement programs, which are designed to help employers manage their corporate health care costs by creating a healthier work force.

The most popular wellness programs continue to be focused on lifestyle management, such as physical activity programs, weight management programs and stress management. Other popular health improvement options include disease/care management programs (e.g., managing chronic health conditions, like diabetes), lifestyle-management services (e.g., weight loss advice, gym membership discounts), health-risk management services (e.g., on-site flu shots) and environmental enhancements (e.g., bike racks, walking paths).

In addition to increasing the average amount spent per employee, the survey finds that most companies see wellness programs as an essential part of their benefits program. The survey finds that 95% of companies plan to offer some kind of health improvement program for their employees, and the percentage of companies offering incentives to participate in these initiatives has increased from 57% in 2009 to 74% in 2014.

When asked about ongoing funding for wellness-based incentive programs, 93% of companies plan to expand or maintain funding for their program over the next three to five years. And 44% of companies plan to maintain or increase their investment in wellness programs, even if their company were to move away from direct involvement in employer-sponsored health coverage, such as a move to a private exchange model to provide health benefits for their employees.

As the design of wellness programs continues to evolve, the survey finds that an increasing number of companies are expanding wellness-based incentives to include spouses and domestic partners. Nearly four out of 10 companies (37%) indicate their program will include spouses and domestic partners in 2014, and the average spouse/domestic partner incentive is expected to reach $530 in 2014, more than $100 higher than the average of $420 in 2010. When analyzing the data by company size, survey results show that employers with more than 20,000 employees expect to spend an average of $611 on spouses/domestic partners in 2014.

While many employers offer incentives through cash or a gift card, an increasing number of employers offer incentives through an employer-sponsored health savings account (HSA), flexible spending account (FSA) or similar care-based savings vehicle. More than one-third (34%) of employers plan to contribute to an HSA or FSA for engaging in a disease or care management program, while 33% plan to offer a similar incentive for participation in a stress management program. Three out of 10 employers (30%) plan to offer incentives through contributions to an HSA/FSA for enrollment in a weight management program.

“While the use and measurement of corporate wellness programs continue to evolve, it has become clear that many employers understand the value of, and are committed to, wellness-based incentives in their company health plan,” says Robert Kennedy, health and welfare practice leader with Fidelity’s benefits consulting business, based in Boston. “Companies are constantly looking for new and creative ways to expand their programs and motivate their work force, such as extending wellness incentives to spouses and offering incentives through a contribution to a health savings account. Increasingly, employers are viewing health improvement even more broadly through the lens of well-being and productivity.”

Helen Darling, president and chief executive officer of NBGH, adds, “It’s encouraging to see how the use of wellness programs has evolved since 2009 and how employers continue to look for new ways to improve their plans and encourage employee engagement. Based on the feedback from this year’s survey respondents, it’s obvious that wellness programs not only play a key role in many corporate health care plans today, but they’ll continue to be an integral part of corporate benefit programs in the future.”

Data for the survey was collected online in November and December of 2013 by the NBGH, in conjunction with Fidelity, and is based on responses from a national sample of 151 companies from numerous industries. The sizes of the companies ranged from fewer than 2,000 employees to more than 50,000 employees.

The National Business Group on Health is a nonprofit organization that represents large employers’ perspective on national health policy issues and providing practical solutions to its members’ health care problems. Fidelity’s benefits consulting business helps mid- to large-size employers nationwide assess the effectiveness of their benefits programs. Fidelity Investments is a provider of financial services.