Incentives Bring Needed Participants to Wellness Programs

An EBRI analysis found individuals who first completed a health risk assessment after an employer offered a financial incentive had greater health risk than those completing it pre-incentive.

Financial incentives appear to be a crucial factor in bringing unhealthy workers into workplace wellness programs, according to an analysis by the Employee Benefit Research Institute (EBRI).

Using administrative data from a large employer that provided anonymous participant information, EBRI analyzed the impact financial incentives had on the first-time participants in the employer’s wellness programs. EBRI found that in general, individuals who first completed a health risk assessment (HRA) or biometric screening in the two or three years after financial incentives were offered were less healthy than early adopters. Moreover, prevalence rates of diabetes, high blood pressure and high cholesterol were all higher in the post-incentive groups than in the pre-incentive groups.

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Individuals who first completed the HRA post-incentive had greater health risk than those first completing it pre-incentive. Employees first completing the HRA post-incentive were more likely than those completing it pre-incentive to be at risk for high blood pressure, inadequate exercise, high glucose, unhealthy nutrition, smoking, and unhealthy weight.

“Our findings paint a vivid picture of who responds to wellness-program financial incentives. They indicate incentives have a strong impact at bringing in the kind of people who really need the program,” says Paul Fronstin, director of EBRI’s Health Research and Education Program, and co-author of the study report.

The analysis found older men were most likely to respond to incentives. Among employees who first completed an HRA post-incentive, 82.4% were male, versus 70.2% pre-incentive, and the gender comparison was similar for biometric screenings. Late adopters also tended to be older: Among those first completing an HRA post-incentive, the mean age was 50, compared with 45 among the pre-incentive group. For biometric screenings, the average age was 48.7 versus 46.4 for the post- and pre-incentive cohorts, respectively.

Visits to specialists were higher for the post-incentive cohorts. Prescription drug utilization was higher as well among post-incentive HRA completers (17 fills per year), compared with pre-incentive HRA completers (14.2 fills per year), and also greater for post-incentive biometric screening completers. In large part, individuals who first completed HRA and biometric screenings after the financial incentives were introduced were less likely to consume preventive care, and they were less likely to have visited a primary care provider.

Late adopters of biometric screening also had worse biometric values. More than one-third (35.2%) of post-incentive biometric screening completers was obese compared with about one-quarter (26.3%) of pre-incentive completers. Further, 50.3% of post-incentive biometric screening completers were pre-hypertensive, compared to 45.8% of early adopters.

The full report, “Financial Incentives and Workplace Wellness-Program Participation,” is published in the March 2015 EBRI Issue Brief, online at www.ebri.org.

ESG Criteria Important for Majority of Investors

A majority of institutional investors consider ESG criteria when making alternative investment allocations, according to research by LGT Capital Partners and Mercer.

Chief investment officers, heads of asset classes and portfolio managers all recognize the positive effects of environmental, social and governance (ESG) integration on risk-adjusted returns, according to Tycho Sneyers, managing partner and chairman of LGT Capital Partners ESG Committee.

Research reveals the majority of institutional investors actively consider ESG criteria when making alternative investment allocations. Sneyers believes ESG analysis has moved beyond ethical concerns and has firmly found its place as a risk and investment management topic. A survey by LGT Capital Partners and Mercer shows most institutional investors are confident that ESG improves risk-adjusted returns and is an important aspect of risk and reputation management.

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The survey analyzes 97 institutional investors in 22 countries. Research into why and how these investors incorporate ESG considerations in alternative asset classes reaches four key conclusions:

  • More than three-quarters of respondents incorporate ESG criteria when investing in alternative asset classes.
  • More than half (57%) believe incorporating ESG criteria has a positive impact on risk-adjusted returns. A mere 9% think it lowers returns.
  • Regarded with significance are issues with the potential to impact a company’s long-term risk, reputation or overall performance. Topics garnering strong support include carbon intensity, controversial weapons and bribery and corruption, while exclusionary criteria such as alcohol or tobacco are rarely considered.
  • Among the institutional investors who incorporate ESG criteria into investment decision-making, 54% have done so for three years or less. This suggests rising expectations for investment managers over time, as well as a need for greater clarity on techniques and strategies for ESG incorporation to help investors progress more quickly.

“It is encouraging to see investors becoming increasingly aware of the potential risks and opportunities these issues can present to portfolios,” says Deb Clarke, global head of investment research at Mercer. “Incorporating ESG considerations into investment decisions strengthens a portfolio’s defense against risks arising from governance failures, changes in policy and regulation, and environmental and social trends. It can also put investors in a better position to take advantage of opportunities arising from a shift towards more sustainable economic growth.”

More information about the “Global insights on ESG in Alternative Investing” research is available here.

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