Financial Incentives a Big Part of Employers’ Well-Being Program Budgets

Companies across the country are expected to spend an average of $3.6 million on physical well-being programs in 2019 to help create healthier and more productive workforces, according to the 10th annual Health and Well-Being Survey from Fidelity Investments and the National Business Group on Health.

While there are various components to corporate well-being programs, the study revealed that 40% of these budgets will be applied to financial incentives that encourage employees, and their spouses/domestic partners, to participate in these programs.

The average per-employee incentive decreased slightly to $762 for 2019, down from $784 in 2018, but is still nearly three times the average employee incentive of $260 reported in 2009. In addition, the percentage of employers offering incentives to spouses and domestic partners increased to 58% in 2019, up from 54% in 2018, while the average incentive for spouses/domestic partners increased to $601, up from $596 in 2018.

While many employers (57%) provide financial incentives to employees by reducing their health care plan premiums, more than one-third (34%) provide incentives by funding an employee’s health care account, such as a health savings account (HSA).

Overall, employers are expected to continue to focus on financial incentives as a key benefit within well-being platforms in the future, as 33% of employers indicated they plan to continue to increase the amount of financial incentives for employees over the next three to five years.

The study also finds that employers continue to focus on providing programs focused on well-being beyond physical health, including emotional/mental health (92%), financial health (88%), community involvement (69%), social connectedness (54%) and job satisfaction (43%). A study from FinFit shows continued engagement in financial wellness programs yields overwhelmingly positive results. The data supports a trend across the financial wellness industry – the longer a company has utilized a financial wellness platform, the higher the employee engagement.

According to FinFit, employees are asking for employers to offer financial wellness programs, leading to an impressive initial participation rate upon program launch. Eighty-five percent of FinFit members say they appreciate their employer more for offering FinFit’s financial wellness program.

“More employers view their investments in health and well-being as integral to deploying the most engaged, productive and competitive workforce possible,” says Brian Marcotte, president and CEO, National Business Group on Health. “Their focus is holistic, with physical health being a component rather than the only priority. Employers recognize that their employees have different needs and want to engage in different ways. Financial and emotional stress, for example, are major detractors from work performance and employers are doubling down on these areas.”

Employers with multi-national workforces

Employers with a multinational workforce are increasingly interested in developing a consistent benefits platform for their employees across different geographies, and many companies have taken steps to offer well-being programs to their global workforce, according to the study.

More than half (56%) of employers surveyed offer well-being programs to their global employees, an increase from 44% in 2018, and another 14% are considering extending their well-being program to workers in multiple geographies by next year. However, only 34% of employers have a global strategy in place, while half (50%) let local markets focus on well-being as needed.

In addition, the overall objectives of well-being programs still vary by region. According to the survey, two of the top objectives of well-being programs in the U.S. are to manage health care costs (82%) and improve employee productivity/reduce absenteeism (59%), while the top objectives globally are to improve employee engagement/performance (82%) and align employees with the corporate culture (72%).

“As more employers recognize the relationship between employee well-being and productivity, well-being programs have taken on an increasingly meaningful role in employers’ business strategies. However, as the benefits landscape continues to evolve, employers need to ensure they are designing their programs to meet the changing needs of their workforce,” says Robert Kennedy, senior vice president, Fidelity Workplace Consulting. “Implementing programs that take a total well-being approach, designing programs for a global workforce and aligning well-being programs with the company’s health care strategy are just a few of the steps employers can take to ensure their well-being program continues to deliver maximum benefit to their organization.”

The 10th annual survey on corporate Health & Well-being from Fidelity Investments and the National Business Group on Health includes responses from 164 jumbo, large and mid-sized organizations. The online survey was fielded during October 2018 and January 2019 among National Business Group on Health members and clients of Fidelity Investments.