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Employer wellness programs spend record $693 per worker

American employers are spending more on wellness programs than ever, but also backing away from penalties, as consumers respond with skepticism and researchers keep probing ROI evidence.

Almost 80 percent of employers are offering wellness and health improvement programs, spending on average a record $693 per worker, according to a survey by Fidelity Investments and the National Business Group on Health. That's up from up from $594 last year and $430 in 2010.

Large companies with more than 20,000 employees are spending the most--some $878 per worker, up from $717 in 2014--while mid-size firms with between 5,000 and 20,000 are spending around $660, up from $493 last year, according to the survey.

The record high spending on wellness comes at the same that the programs are more controversial than ever, despite the Affordable Care Act's blessing for employers to tie up to 30 percent of health plan premiums to a worker's participation in health improvement activities.

Well-organized employees like the faculty at Penn State University have succeeded in killing health risk assessments and financial penalties, and in the last year, the Equal Employment Opportunity Commission has sued three companies on the grounds that their wellness programs are violating federal anti-discrimination laws by coercing people into participation.

"Employees are not uniform in their receptiveness" to wellness programs, notes a separate report from the Health Enhancement Research Organization and the Population Health Alliance. "While some are grateful for the opportunity to improve their health and for access to programs that will help them do so, others find the programs intrusive, coercive and are otherwise simply not interested in participating."

The Health Enhancement Research Organization report lists morale and other negative results as a "tangential costs" in wellness that can nonetheless impact the ROI of the program: "The first thing that became clear while investigating these various tangential costs is that the first three (employee morale, company reputation, legal challenges) are significantly impacted by the presence of financial incentives tied to participation or engagement in these programs. Without incentives in place, an EHM program is simply a benefit which an individual can take or leave, as they please. As soon as an organization begins treating individual employees differently depending upon their utilization of these benefits (i.e., offering incentives) the potential for these unwanted consequences is created."  

Indeed, the Fidelity and National Business Group on Health survey found that wellness programs are increasingly dropping financial penalties for non-participation and instead using rewards--gift cards, premium discounts or contributions to a health spending account.

Among the most common features of wellness programs, 72 percent of the surveyed employers offer incentives for biometric screenings, 70 percent offer incentives for health risk assessments and 54 percent offer incentives for physical activity programs. Among those employers, only 6 percent use disincentives for not taking a health risk assessment and only five percent use disincentives for not getting a biometric screening--down from 11 percent and 12 percent respectively in 2014, according to the survey.

None of the 121 companies surveyed use disincentives for not joining in physical activity programs, although 17 percent do apply penalties for employers who smoke and do not take cessation counseling.

As for employee participation, less than half of the workforce covered in the survey used the programs to the full extent and earned the full incentive; 26 percent earned a partial incentive.

"It's extremely encouraging to see an ever-increasing number of companies embrace corporate wellness programs as a way to promote a healthy workforce," said Brian Marcotte, president and CEO, National Business Group on Health. "We expect to see employers continue to expand and evolve their wellness offerings, and find new and innovative ways to encourage employee participation levels and measure the success of their programs."

The future of wellness programs are very much an open question, however. The recent rancor--EEOC lawsuits and dueling blogs and researchers questioning the foundation of wellness programs--could aptly be described as the "Wellness Wars," as RAND analyst Soeren Mattke put it in Health Affairs.

There is the issue of whether employees end up in better health, depending on the features of the program and the incentives involved, all of which remains to be seen. There is also the question of whether wellness programs are paying off for employers. On that front the data collected in the Population Health Alliance and Health Enhancement Research Organization report casts the ROI in doubt--estimating program costs at $1.50 per covered member per month with savings of just under $1 per member per month.

At this juncture, both critics and proponents have a point, wrote Mattke, the RAND analyst: "We have found that program participation is associated with statistically significant improvements in biometric markers, like BMI, and health-related behavior, like smoking and exercise. But we also find that those changes are not large enough, and the relationship between health risks and spending too weak, to result in reduction of health care cost, let alone in return of investment."

Rethinking wellness "What are you offering to reduce stress and have a positive community impact?"