How to Cash In on Your Good Health

Cultivating healthy habits can get you everything from discounts on insurance to freebies to a big chunk of cash.

Piggy bank with Doctor’s stethoscope on green wooden board. This photo may use as financial background.
(Image credit: crazydiva)

Terry Coffey, 52, has found a way to earn hundreds of extra dollars from his employer each year—and get healthier, too. He works for Draper Inc., a Spiceland, Ind., company that manufactures window shades for schools and offices, as well as gymnasium equipment. Coffey has benefited both physically and financially from making the most of his employer’s active-wellness program.

Coffey meets with the company’s health coach each year, spends his lunchtime walking on the track Draper installed next to its factory, and has received an extra $250 to $500 in his health savings account every year for meeting his wellness goals. Tracking his steps on his iPhone also made him eligible for drawings with big prizes—including $2,500 in cash or a trip to Hawaii. And his whole family, including his 8-year-old daughter, Heidi, uses the on-site health clinic, at just $10 a visit. “We’ve been able to take advantage of a lot of cost savings,” he says.

If you’re searching for ways to earn extra money, look into your employer’s wellness program for the coming year. A healthy lifestyle makes you feel better and helps reduce long-term medical expenses, and participating in the program could earn you cash right now.

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For employers, the benefit of wellness programs is clear: Helping employees get healthy can ultimately reduce insurance claims and boost productivity. But there’s more than money involved on both sides of the equation. Improved morale and less turnover among employees are benefits, too. “Companies started doing wellness because of the health care costs, but they also found their employees liked it—the program created a sense of community and made employees feel they had the support of their colleagues and organization to get healthier,” says Evren Esen, director of workforce analytics for the Society for Human Resource Management.

The program at your workplace may be very different than it was just a few years ago. The first generation of wellness programs was often a lot of hassle for little benefit: A time-consuming health screening or regular meetings with a wellness coach might have garnered you a wellness newsletter and a modest gift card. But employers are now making their programs more flexible, fun and focused on results—and they’re offering much bigger financial incentives to participate. Nearly 40% of the employers surveyed by the Kaiser Family Foundation offered maximum wellness rewards of $500 or more in 2016, with 16% topping $1,000 per year. Some double the numbers if your spouse participates, too.

The financial incentive doesn’t always come as cold, hard cash. It might be in the form of a contribution to your health savings account or reduced health insurance premiums. The noncash perks that also save you money include free gym memberships and fitness classes, and gift cards for participating in races. Some employers are opening on-site health clinics and giving employees free access to wellness coaches, nutritionists and stress counselors. And they’re bringing weight-loss, smoking-cessation and disease-management resources to the office.

One step at a time

Rather than insisting on an overnight makeover, many employers encourage you to weave activity into your day, including offering team challenges. “They’re focusing on participation as opposed to outcomes, and they reward the effort,” says Sunit Patel, senior vice president, Fidelity Benefits Consulting.

For example, at BASF, the world’s largest chemical producer, employees and their spouses can each receive a Visa gift card of up to $100 per quarter for participating in the company’s wellness program. They earn points toward the rewards by getting a biometric screening or signing up for a weight-loss program, monitoring their nutrition and calories, taking wellness classes, participating in fitness challenges, and tracking their steps (the company gives out free pedometers). “Moving more is the easiest way to rack up points,” says Mollie O’Brien, BASF’s director of total rewards. The company also reimburses employees for buying fitness equipment or joining a health club. All in all, “a couple can get $1,100 or more each year,” says O’Brien.

About half of BASF’s 15,000 employees participate in the program. “Once people sign up and get started, it gets incorporated into their life,” says O’Brien. “A lot of people are now joining their colleagues and walking at lunchtime, or they may have walking meetings. It’s a business decision to try to lower health care costs, and I also feel like it’s the right thing to do.”

Lenny Jenkins, a senior project manager at BASF in East Setauket, N.Y., has received $300 so far for participating in the program. “But being more fit is the real reward,” he says. He had no idea how little he was moving each day until he signed up for the program and wore a pedometer for a week. “That in-your-face evidence brought an end to all denials,” he says. To get extra steps, he started parking farther away, pacing during conference calls and walking to the store for groceries. “You don’t realize how being less fit affects your life until your fitness improves,” he says.

Jenkins also says the program helps with camaraderie among BASF colleagues. “I travel a bit for my job, and whenever I am in another BASF location, people will discuss how well they are doing in reaching the step goals. We now talk openly about fitness and nutrition.”

Putting wellness on-site

It’s easy to see that wellness is a priority at Draper Inc. Not only did the company build the walking track next to its factory, but it also installed a “wellness park,” with exercise stations, table tennis, volleyball and a community garden. Employees and their families can take advantage of its on-site health clinic, which is staffed by employees of a local hospital, and meet with a wellness coach free throughout the year. The company also pays for voluntary weight-loss and smoking-cessation programs.

Draper’s 600 employees can get hundreds of dollars added to their health savings account each year for reaching wellness goals they set with the coach, and the company offers creative group activities with big rewards. In the “Walk to Hawaii” challenge, for example, employees who walked 2.4 million steps over 11 months were entered into a drawing for a trip to Hawaii. The company also offers rewards for smaller challenges, such as Subway gift cards for walking a mile during lunch.

Coffey, who works as a technical writer and external communications specialist for Draper, and his wife, Karen, have their cholesterol, glucose, blood pressure and weight assessed at the beginning of each year, then meet with the health coach to set their annual goals. One year, Coffey’s main goal was to reduce his blood pressure; another year, it was weight loss and exercise. He bundles up in the winter to take his lunchtime walks, and he tracks his steps on his iPhone when he takes his dogs on long walks in the evening. Coffey has taken healthy-cooking classes at work and even tried planting vegetables in the community garden. Although he did not win the Hawaii trip, he is now in a yearlong step-tracking contest for the $2,500 drawing.

“It costs money for a company to do this, but the payoff down the road will be that people are healthier,” says Coffey. For his part, wellness has had another, immediate payoff. He recently applied for life insurance, and his good health helped him qualify for the best rate.

Expanding the mission

Employers are also realizing that there’s more to wellness than physical health. “They’re broadening their programs to include social, emotional and financial well-being,” says Alexander Domaszewicz, head of the health care consumerism group at Mercer, a management consulting firm. Some 87% of the large employers surveyed by Fidelity Benefits Consulting and the National Business Group on Health offer emotional or mental well-being programs, and 76% provide financial health programs.

The wellness program at online shoe retailer Zappos reflects this holistic approach. In addition to offering financial incentives for healthy activities, a full schedule of on-site fitness classes and a companywide basketball tournament, Zappos has expanded its wellness program to include financial and stress-management classes. It has offered a one-year subscription to financial program LearnVest and introduced an employee-assistance program in which people can call in for help with topics ranging from financial stress to depression. “We wanted to help employees get more well overall—both physically and mentally,” says Kelly Maher, wellness coordinator for Zappos. “We’re trying to tie everything in together to make happier employees.”

Save on life insurance

Even if your employer has yet to join the wellness bandwagon, you can earn financial rewards on your own by getting and staying fit. How so? Good health can mean lower rates on your life insurance.

Most insurers have four or five rate levels, and only the healthiest people qualify for the super-preferred prices. You’ll usually have to pay more if your weight, cholesterol or blood pressure is above certain levels. You’ll definitely pay a lot more if you smoke. And you may have difficulty finding affordable coverage if you’ve had a major health issue, such as cancer. If you lose weight or reduce your blood pressure or cholesterol, however, or if you stop smoking, or if several years have passed since your last cancer treatment, you could score a much lower rate by shopping around.

Waiting and then shopping worked for Lloyd Chambers of Palo Alto, Calif. Even though he’s an endurance athlete—he competes in several 200-mile bike races each year—he had a tough time getting a life-insurance policy when he was in his early forties because an MRI he had taken after experiencing dizziness revealed a bulge in a vein near his brain. Although his doctor assured him the risk was very small, insurers worried that the vein would burst.

He finally found an insurer that would cover him, but he had to pay three times as much as a person in good health. “All the other metrics were good, but because of this one scan, they gave me the high-risk rate,” he says. Chambers bought half as much insurance as he originally wanted, and for a term of just 10 years (even though he had young children) because his premiums were so high.

Seven years later, when he was 50 and his policy’s term was about to expire, he worked with an AccuQuote agent to shop for new coverage. After additional tests showed no change in the condition, he was able to get a policy from Prudential at the best rate for his age—paying just slightly more for twice as much coverage and locking in a 15-year term that will cover him until after his three children are out of college.

Looking for lower rates. How long you have to wait to go premium-prospecting depends on your health. For instance, you may qualify for a better rate within a few months of improving your blood pressure or cholesterol level, even if the change is thanks to medication, says Byron Udell, CEO of AccuQuote. If you lose weight, you’ll probably have to keep it off for a year before insurers will drop your rate by the full amount, he says. If half a year has passed, you might get half as much knocked off. He recommends switching as soon as you can get the lower rate, rather than waiting and risking a health setback in the meantime.

Smokers generally have to pay about four times the healthy rate, but you can slash your premiums after you quit. You may qualify for a standard nonsmoker rate after a year and could get a preferred rate after two or three years, says Udell. You might even qualify for the insurer’s preferred-plus rate if you haven’t smoked in five years.

A bout with cancer once meant you had to wait 10 years without a recurrence to qualify for a lower rate on life insurance. Now, for some kinds of cancer, you may be able to get a better rate if two or more years have passed since you completed treatments. “It depends on how advanced it was when it was found, how well it was contained, and what the treatment and prognosis were,” says Udell.

Some insurers, including John Hancock, are coming up with their own wellness programs. For instance, John Hancock’s Vitality policy, which has term and permanent versions, lets you cut your rate by up to 15% each year by participating in wellness activities, such as walking a certain number of steps, going to the gym, running a race, getting a flu shot or taking health screenings.

Is Big Brother watching?

Do you really want your boss to know what you’re stressed about or how you score on your medical tests? And what if you decide not to participate in the program at all?

You probably don’t have to worry on either front. Several years ago, some employers penalized employees if they didn’t participate in a wellness program. Now, the trend is toward the carrot rather than the stick—you’ll get financial incentives for participating and will simply miss out on them if you don’t. And there are rules about what employers can and cannot do. They can’t, for example, require you to participate in a wellness plan in order to be eligible for certain levels of health insurance, but they can offer lower premiums if you do.

As for privacy, most employers work with their health plan or a third-party wellness provider to manage the wellness program, keeping your data at arm’s length of the boss and providing only general information about participation and overall results rather than any individual information, says Sunit Patel, senior vice president, Fidelity Benefits Consulting. Some employers work with separate payroll companies that get information about employees’ participation directly from the wellness firm, so the employer doesn’t know what incentives or premium discounts individual employees are receiving, he says.

Privacy is a key reason Endurance International Group, a Massachusetts-based company of 3,000 that establishes web presence for small and medium-size businesses, chose to work with Interactive Health, an independent wellness company. Endurance employees can receive $600 off their annual health insurance premiums for participating in the wellness program, $750 if they have self-plus-one coverage, or $1,000 if they have family coverage. In the first year, the only requirement for the discount was to sign up and get the biometric screening; 86% of employees participated.

The standards became tougher the next year, when employees had to meet certain goals based on improvements in their weight, blood pressure, glucose level, cholesterol or other health factors in order to earn the discounts. Interactive Health does the tests and lets Endurance know how much money to subtract from each person’s insurance premiums. “It’s completely separate from the employer, and the information is not even shared with our health carrier,” says Kimberly Preston, Endurance’s vice president of total rewards.

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.