Financial Incentives and Workplace Wellness-Program Participation

20 Pages Posted: 31 Mar 2015

See all articles by Paul Fronstin

Paul Fronstin

Employee Benefit Research Institute (EBRI)

M. Christopher Roebuck

RxEconomics LLC

Date Written: March 2015

Abstract

This paper examines administrative health insurance claims, wellness-program participation, and data collected from health-risk assessments (HRAs) and biometric screenings. It reports distinct differences between individuals who participated prior to the enhancement of financial incentives and those who first participated after the new incentives were in place. Indeed, employees who delayed completion of an HRA and/or biometric screening were more likely to be male, older, higher wage earners, and in poorer health -- as evidenced by higher Charlson Comorbidity Index scores; and to have higher prevalence rates of obesity, diabetes, pre-hypertension, high blood pressure, and high cholesterol. Moreover, patients first completing an HRA and/or biometric screening post-incentive had greater use of specialist visits, and prescription drugs; and were less likely to use preventive services, such as preventive office visits, breast cancer, cervical cancer, and colorectal cancer screening. In short, the employees who had abstained from participating in the workplace wellness programs were likely the ones in need of them most. The significantly increased financial incentive appears to have been effective at encouraging their participation. While results from this study cannot shed light on the magnitude of financial incentives necessary to sufficiently bolster participation, a greater proportion of employees remained unscreened for biometrics under the financial incentive than the fraction of the population without a completed HRA. The differential may be due to the time required to complete each, for which the individual may incur opportunity costs. Support for this theory is provided by the fact that higher income earners were more likely to forgo the wellness programs. Firms offering wellness programs should expect to have to employ financial and other incentives to encourage member participation. Relatively low financial rewards may attract the young and well. Higher financial incentives -- while more costly for the employer in the short-run -- may bring in older, less healthy employees who are consuming more health services, and accounting for a large proportion of health care spending. If wellness programs are effective at improving patient health, positive longer-term, returns-on-investment (ROI) may support the use of high financial incentives. Forthcoming research will investigate the impact of these wellness programs on health-services utilization and spending, as well as worker productivity.

Keywords: Biometric screenings, Employment-based benefits, Financial incentives, Health care services, Health care utilization, Health insurance coverage, Health risk assessments (HRAs), Wellness programs

JEL Classification: I1, I18, J3, J32

Suggested Citation

Fronstin, Paul and Roebuck, M. Christopher, Financial Incentives and Workplace Wellness-Program Participation (March 2015). EBRI Issue Brief, Number 412 (March 2015). Available at SSRN: https://ssrn.com/abstract=2587248

Paul Fronstin (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

901 D St., SW
Suite 802
Washington, DC 20024
United States
202-775-6352 (Phone)
202-775-6312 (Fax)

M. Christopher Roebuck

RxEconomics LLC ( email )

11350 McCormick Road
Executive Plaza II, Suite 705
Hunt Valley, MD 21031
United States
410-215-8380 (Phone)
410-696-5802 (Fax)

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