More Carrot Than Stick

Sue Eskedahl tells a story of a man who works for a company she knows. He’d never had his blood pressure checked until his employer offered him a financial incentive for participating in a voluntary health risk assessment, conducted by SimplyWell, an Omaha-based firm. When the employee’s blood pressure was found to be quite high, he quickly got into a program to improve and control his condition.

“He probably avoided an emergency room visit,” says Eskedahl, vice president of Employers Association, a Plymouth-based human resources consulting firm.

Like most U.S. companies offering wellness programs, the man’s employer uses the “carrot” approach, in which employees are rewarded for positive behaviors, not penalized for negative ones. Although employers sometimes consider using a “stick” approach that would assign higher health insurance costs to employees exhibiting risky behaviors, few employers opt to go that route.

Employers Association, for example, offers an incentive program to its own employees that awards them $25 for completing a two-part health risk assessment, including a questionnaire about the employee’s risk factors and medical tests, such as a blood draw. Employers Association benefit staff does not see any individual employee’s results, only aggregate findings.

“Based on that, you might identify things that need to be taken care of, but if they’re taken care of early on, the benefits for the employer and the employees could be significant,” Eskedahl says.

Employers Association also uses a point system to reward employees for exercising, participating in coaching programs to lose weight or quit smoking, and even for routine tasks such as washing windows at home. Based on the points they earn, employees can receive up to $50 in gift cards and $200 toward health reimbursement each year. Fifty percent of Employers Association employees have opted to participate.

Reward the Good

For employers who are struggling to change unhealthy employee behavior, the “stick” approach may seem to be an attractive option. “[But] you very quickly get into legal ramifications and that tends to close the conversation,” says Nico Pronk, vice president for JourneyWell, a business owned by Bloomington-based HealthPartners that is focused on wellness programs. Differential premiums based on health conditions—also known as an outcome-based approach—are in many cases illegal. One exception, sources say, is smoking. But a program that penalizes employees for smoking can be difficult to administer. Whether or not an employee smokes can be detected through a medical test, but how often can such a test be administered? How long does an employee have to be smoke-free? And what about employees who quit, then start again?