Why It Pays to Join the Company Wellness Program

More companies are offering incentives to sign up. Some are penalizing you if you don’t.

My employer just announced a new wellness program and says it will charge me more for my health insurance if I don’t participate. Why?

The Kaiser Family Foundation’s study of 2014 health benefits found that almost all large employers (those with 200 or more employees) and nearly three-fourths of smaller employers that offer health benefits also offer wellness programs. Some of the programs give you access to free services, such as weight-loss programs, on-site exercise facilities (or gym membership discounts), smoking-cessation programs, nutrition classes, flu shots and wellness newsletters.

More than one-third of the large employers (and 18% of small employers) provide a financial incentive for employees to participate, by reducing health insurance premiums or deductibles, making contributions to participants’ health savings accounts, or offering gift cards, cash or merchandise.

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The rewards can be big: Nearly one-third of the employers that provide a financial incentive for completing (not just participating in) a wellness program offer a maximum of $500 or more. Likewise, more than half the large firms offer employees a financial incentive to take a health risk assessment, and more than one-third offer a maximum reward of more than $500. Others rely on a stick rather than a carrot; 7% of the large firms that offer health risk assessments penalize employees who are found to have health risk factors but don’t complete a wellness program.

Nearly half the employers offering biometric screening to measure cholesterol, blood pressure, stress or nutrition give employees $500 or more for participating, and 8% bestow financial rewards or impose penalties based on outcomes (such as meeting a target body mass index or managing cholesterol levels).

You’re likely to see even more emphasis on wellness benefits in 2015. The National Business Group on Health found that 46% of large employers plan to make contributions to employees’ HSAs based on completing a wellness or education program (up from 30% in 2014), and 13% plan to make contributions based on progress towards a health goal. See What to Expect From Your Health Insurance in 2015 for more information. Keep these incentives in mind when picking your plan and making other health-care decisions during open enrollment this fall.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.