Thursday, August 09, 2012 Employers Increasing Incentives to Gain Participation in Wellness Programs With the cost of employer-provided health care benefits at large US employers expected to rise another 7% next year, employers are considering a variety of cost-control measures, including asking workers to pay a greater portion of premiums but also sharply boosting financial rewards to engage them in healthy lifestyles, according to a new survey by the National Business Group on Health, a nonprofit association of 342 large employers. Six in 10 employers plan to increase the percentage of the premium paid by employees in 2013, although the majority of those employers indicated that the increase would be by a small amount (less than 5%). While many employers continue to adopt cost-sharing provisions, survey respondents now consider consumer-directed health plans (CDHPs) and wellness initiatives to be more effective at stemming cost than shifting costs to employees. According to the survey, 43% cited a CDHP as the most effective cost-control tactic followed by wellness programs (19%). Less than 1 in 10 (9%) respondents reported increased employee cost-sharing as the most effective tactic. Last year, cost shifting was cited as the most effective measure. The survey found that employers continue to experiment with and perfect the best ways to incorporate financial incentives into wellness programs. While nearly half of respondents (48%) use incentives to encourage participation in programs, some employers are basing incentives on specific health outcomes. More than 4 in 10 (44%) provide an incentive based upon tobacco-use status while 29% base awards upon achievement of outcomes such as BMI or cholesterol levels. About 22% apply surcharges to employees who do not participate in certain programs. Additionally, employers plan to sharply increase the incentive amount for maintaining a healthy lifestyle or participating in a wellness program. Among employers that offer incentives, the median amount employees can earn will jump 50% from $300 this year to $450 next year. The median incentive amount that dependents can earn is expected to increase from $250 this year to $375 in 2013. The survey also found that employers are continuing to make adjustments to their benefit plans to comply with additional provisions of the health reform law. Half of all respondents (50%) indicated that they no longer have any annual benefit limits in place, while 32% reported that they did not make any changes to their annual limits this year. Among employers making changes for 2013, the most common benefits requiring adjustments to their annual limits were mental health and substance abuse (9%) and rehabilitative services and devices (9%). The survey, based on responses from 82 of the nation's largest corporations, was conducted in June 2012 prior to the Supreme Court's announcement to uphold the health care reform law.