Employers Adding More "Sticks"

I am not surprised at all by this:

Employers’ appetite for penalizing workers for unhealthy behaviors is growing, according to a new survey by Hewitt Associates Inc.

Hewitt’s annual health care trends survey shows that 47% of employers either already use or plan to use financial penalties during the next three to five years for employees who do not participate in certain health improvement programs.

Of those companies, 81% say they will penalize employees through higher premium contributions. About 17% said they may increase deductibles, while another 17% said they were considering higher out-of-pocket expenses as penalties.

When asked what types of behaviors or programs they were planning on penalizing, 64% cited smoking, while 50% said they would penalize those not participating in disease management or lifestyle behavior programs. Indicating that they may assess penalties in more than one area, 45% of employers responding to the survey said they would penalize workers for not participating in biometric screenings.

Explaining the survey findings, Cathy Tripp, a principal in Hewitt’s Health Management practice in Lincolnshire, Ill., said in a statement that “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 vs. 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 behaviors,” Ms. Tripp said.

Although a growing number of employers are leaning toward penalties, the majority continue to use financial incentives to encourage employees to participate in wellness programs. This year, about 63% are offering employees cash incentives for completing health risk questionnaires, up from 35% in 2009. In addition, 37% of employers are providing cash incentives to employees who participate in health improvement and wellness programs, up from 29% in 2009.

The Hewitt survey did not ask employers about their use of penalties in 2009.

The survey included responses from nearly 600 large U.S. employers representing more than 10 million employees, conducted from December 2009 to January 2010.