The Best Wellness Program Incentives for 2022
When organizations want to motivate their employees to participate in their wellness programs, organizations are challenged to help employees create lasting behavior change. To change unhealthy behaviors into long-lasting healthy behaviors, the organization must help their employees make a fundamental shift in values and beliefs.
However, most employees are comfortable with their current habits and are not open to shifting their values and beliefs around wellness. Organizations can build incentive programs to stimulate employee participation, which can help support employees discover the life-changing benefits of healthy habits.
In this article, we will discuss how organizations can use incentives to boost their short-term employee engagement and set the groundwork for long-term employee engagement with their wellness programs.
What Wellness Incentives Should You Offer Employees?
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Providing incentives is one of the fastest ways to increase wellness program engagement. Incentives are helpful in motivating employees who are not intrinsically motivated to participate on their own.
Common incentives considerations focus on financial incentives such as healthcare premium deductions or gifts. However, anything can become an incentive if there is demand.
Take a look at the four categories of employees that can engage with the wellness program:
- Healthy employees practicing wellness on their own
- Employees that need some support and encouragement to begin
- Employees that need to be motivated to practice wellness
- Employees that refuse to participate in the organization’s wellness program
Each group has different motivations when considering participating in the wellness program.
We wrote an article that discusses how organizations can tap into each group’s motivations to optimize wellness program engagement.
When employers leverage incentives to encourage participation, they use two distribution structures:
- Participation-based incentives – rewarding employees after completing a wellness activity such as a biometric screening, attending a series of wellness classes, or finishing a health risk assessment.
- Outcome-based incentives – rewarding individuals for achieving an outcome, typically health-related such as lowering weight or cholesterol, the number of miles walked, or the number of classes attended.
46% of large organizations use participation-based incentives, while 5% use an outcomes-based approach. This means nearly half of all organizations don’t have a formal wellness incentives program. Why?
As organizations formalize their wellness incentives program, each organization must evaluate their program for legal risks. Four regulatory acts affect wellness incentives programs:
- Health Insurance Portability and Accountability Act (HIPAA)
- Affordable Care Act (ACA)
- Americans with Disabilities Act (ADA)
- Genetic Information Nondiscrimination Act (GINA)
Many organizations do not have outcome-based incentives because of the risk and resources required to develop and maintain an outcome-based approach as the regulatory framework within the United States continues to change.
Cigna’s wellness fact sheet outlines the federal regulations that intersect with wellness program incentives.
Even though incentives can boost employee engagement with the wellness program, the increase is often short-term. The reason is because of “incentive exhaustion”, when employees are no longer motivated by the incentives. Organizations have to up the ante every time incentive exhaustion sets in.
If organizations rely on incentives to maintain employee participation, the incentives program will constrain the entire wellness budget. Resources are diverted to create new, compelling incentives instead of dedicating those resources to improving the actual program and helping employees create self-sustaining habits.
NOTE: Wellness incentives can carry legal risks. Consult your organization’s legal team for navigating the federal and state laws that may affect your wellness incentives program. While the practices shared in this article may help an organization engender a positive wellness culture and help optimize engagement, this information should not be taken as legal advice.
Have a Sustainable Plan for Generating Long-Term Engagement
Any wellness program’s goal should be the employee’s progression towards wellness, not prizes. Incentives can create employee dependence on the wellness program and keep employees in an extrinsically motivated mindset if the organization doesn’t pay attention to its messaging.
When using wellness incentives, please plan to help employees discover their own intrinsic motivations for participating in the program. The goal of workplace wellness programs is to help employees adopt lifelong healthy behaviors.
Take the category of healthy employees practicing wellness on their own. They may need to be incentivized financially, with gifts, or with recognition. But suppose the wellness program can help them identify their internal motivation. In that case, these employees will begin to participate in and champion the wellness program to help guide their coworkers on their own wellness journeys.
When employees are intrinsically motivated, they don’t require carrots or sticks to continue to engage with the wellness program. Engage these employees by connecting their internal motivation with the services provided by the wellness program to encourage ongoing participation.
Keep the Incentives Small
The next principle to follow is to never let incentives become the focus of the wellness program. When incentives are the primary means for motivating employees to participate, the effect can lead employees to view their relationship with the wellness program as transactional or a competition, discouraging participation from employees who may need the program the most.
An excellent way to ensure incentives don’t overshadow the intrinsic benefits of wellness is to frame the incentives as bonuses. Though this may preclude an organization from using an outcome-based model, this better aligns with the overall mission of the wellness program.
Use Reward Incentives, Not Punitive Ones
Even though punitive incentives leverage the power of loss aversion, the consequences can erode trust in the organization and even lead to legal trouble.
Consider that an organization may use penalties to motivate employees to participate in a smoking cessation program, but would the penalties be received the same for holistic wellness program participation?
There is a potential caveat. Say an organization gave employees the ability to pick a charity that the organization would donate to on behalf of employees who did not meet the participation or outcome threshold for the wellness program. Instead of viewing their performance as a failure, employees are intrinsically rewarded by being given a choice to pick a charity. This redirection can effectively create engagement without the cultural risks of a simple punitive incentives program.
For this to work, the organization must already have a trusting relationship with its employees. Otherwise, the employees may view this incentive configuration with cynicism.
Never Sacrifice Programming for More Incentives
Because incentives require constant reimagining, leading to increased costs, it is important for the organization to set budget constraints. Our recommendation is never to allow incentives to out-prioritize actual programming.
It is better to offer programming to the one employee who shows up on their own than to offer incentives to hundreds of employees who are only there for a prize.
A RAND study found that comprehensive programs have the highest participation rates and benefit the most from using rewards-based incentives.
RecognitionRecognition is a powerful extrinsic motivator. It’s also free. Every organization can generously shower their participating employees with recognition with the right intent. So often, organizations lean into gifts and financial incentives because it seems like these incentives infer a sense of recognition. But as has been stated before, these tangible and financial incentives can make the relationship feel transactional. If the incentives are small, the -in recognition will correspondingly be small. The key to making recognition a compelling incentive is to build it throughout the wellness program:
- Involving leadership in recognizing employees
- Using data to identify the most engaged employees
- Incorporating recognition into the wellness program’s ongoing engagement strategy
Prizes & GiftsWhile organizations may be tempted to settle for gift cards, prizes present an opportunity to interleave recognition and personalize every reward. This can also be a great way to involve leadership in the wellness program by providing a personal touch to the distributed gifts. Keep the prizes and gifts small and lean into rewards that are hard to put a price on to mitigate the potential of employees viewing participating in the wellness program as transactional.
Financial IncentivesWhile this article has discussed the potential challenges of using financial incentives, these are still powerful motivators. Everyone wants to save money, and in uncertain economic times , everyone would appreciate having extra cash in the bank. What’s essential is messaging. Does the organization present the financial incentives blatantly as carrots or sticks? Or does the organization have a more sophisticated way of sharing its mission and desire to see its employees well across the eight dimensions of wellness? Here are four financial incentive ideas:
- Discounted healthcare premiums
- Smaller deductibles
- Contributions to health savings or flexible spending accounts
- Cash bonus for enrollment and/or completion of wellness programming