US employers penalise unhealthy workers

by 20 Apr 2010

Companies in the US are increasingly penalising workers for unhealthy behaviour, according to a new survey by Hewitt Associates.

While US employers continue to use financial incentives as a way to increase employee participation in health and wellness programs, nearly half (47 per cent) either already use or plan to use financial penalties over the next three to five years for employees who do not participate in certain health improvement schemes.

Hewitt's annual health care trends survey said this shift in strategy suggests that companies are increasingly challenging employees and their dependents to be accountable for the decisions they make regarding their health.

The survey of nearly 600 large US employers representing more than 10 million employees revealed that employer use of financial incentives is also growing. More than half (58 per cent) offer employees incentives for participating in health and wellness programs.

Of those companies using or planning to use penalties, the majority (81 per cent) say they will do so through higher benefit premiums. Increasing deductibles (17 per cent) and out-of-pocket expenses (17 per cent) were also cited as possible penalties.

When asked what types of behaviours or programs they would penalize, 64 per cent of employers cited smoking, 50 per cent indicated not participating in disease management/lifestyle behaviour programs and 45 per cent noted not participating in biometric screenings.

Cathy Tripp, a principal in Hewitt's Health Management practice, said: "The economy and continued escalation of health care costs have driven many employers to be a little more bold and demanding of their employees, making disincentives an increasingly attractive option.

“As companies learn more about their workforce, they're realizing that some people may be more motivated to take action if they risk losing $100 versus gaining $100. The key for each employer is to find the right mix of strategies and plan designs that will motivate employees to be healthier, but not go so far as to drive the wrong behaviours."


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