Are Health-Care Incentives Worth It?

Employees at Frantz Ward, LLP, in Cleveland, lost more than 400 pounds in the past year, and so far more than one dozen have quit smoking. They are taking the stairs instead of elevators, and participate in “salad days,” to eat more healthy lunches.

Together, they are taking steps to living healthier, and it all started because of their boss.

Co-founder Keith Ashmus implemented a wellness program at the firm several years ago, he said, after noticing the company’s insurance carrier was placing higher emphasis on healthy living and wellness incentives. With the cost of health care on the rise, and small businesses struggling for funding, health-incentive programs are a way for small firms to possibly reduce insurance premiums while promoting healthy living amongst the workforce.

If an employee at Frantz Ward completes the Weight Watchers program successfully, he or she is issued a $50 check from the company’s insurance carrier, Medical Mutual of Ohio. The carrier also gave out free pedometers to employees interested in getting more exercise during the day.

“It's encouraging for them,” said Ashmus, who is also former chair of the National Small Business Association in Washington, D.C. “Our programs are not punitive, but encouraging.”

Amanda Austin, director of Federal Public Policy at the National Federation of Independent Business in Nashville, Tenn., said small business owners often struggle to instate and follow through on such incentive plans, due to budget constraints and the lack of any immediate monetary returns.

“Small businesses are more likely to not even be able to offer insurance in the first place, so to maintain insurance is their first struggle,” she said, “They can see between 10 and 15% to 35 to 40% increases in health-care costs annually, so they have to look into [incentive programs] to see if they will reduce costs.”

Before going out on a limb to bring an incentive program to your office, have a serious talk with employees about whether or not they would take advantage of such programs, Austin said. While smaller companies can’t afford to necessarily put in a gym for employees, they can do smaller things like offer gym membership discounts or have workers participate in weight loss programs, she said.

“They have to look for outside experiences,” Austin said of employers. “If they incorporate them in, they may see a reduction in health-care costs. It depends on the state in which the business is located and the extent to which the insurance industry values the [incentive] method they are using.”

Ashmus’ employees may be feeling better, but the wellness initiative has yet to impact the cost of health insurance for his company, which he says is “too high.”

At the same time, the initiative itself has yet to cost the company anything but time. And it has offered its share of rewards, too.

“The program is one way of building morale and keeping it high,” Ashmus said.

As of right now, not many small businesses are jumping headfirst into the incentive game, Austin said. If the Obama administration’s health-care reform act does stick, however, they may have more reason to get into the healthy game.

And employees that are healthier are often more productive and are more likely to be in the office than those who are not, Austin said, so providing such incentives may be a win-win scenario for workers and employers alike.

“Wellness is a very personal thing,” she said. “When a worker is healthy, the employer benefits on their behalf.”