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Best Practices: Designing Effective Integrated Incentives Programs for Employee Health and Wellness [PART 2]

May 11, 2011 / Employee Wellbeing Best Practices

Part 2: Determine the Right Incentives Structure

Last week, I began a series about how to design an effective integrated incentives program for employee health and wellness – one that brings everything you want to offer under one umbrella – by first suggesting some key considerations.  Have you answered those questions? If so, you’re ready to begin designing your program.

In my experience working with large organizations across the U.S., I’ve found that there are 3 best practices when it comes to developing a robust and effective program. Today, we’ll discuss the first one: determine the right structure for your incentives-based programs. To do this, you must:

  • Tie your incentives to your desired outcomes or to the behaviors you want to encourage.  Do you just want your employees to participate in your programs, or are you looking for specific outcomes? More and more, employers are raising the bar when it comes to incentives, requiring more than just participation. They want employees to achieve specific health-related goals, such as lowering cholesterol levels or BMI in order to earn the incentive.
  • Identify the various health-related activities that employees must complete to earn the incentives you’re offering. Get specific and choose the programs for which employees can earn incentives.  Some examples: complete a health risk assessment; undergo a biometrics screening; sign a tobacco-free declaration; complete a health-coaching session; increase and track physical activity; choose healthy foods in the cafeteria.
  • Define each activity’s specific incentive and completion timeline. What will you allocate for each health-related activity? Will a specific completion date benefit your organization?  If so, tie the incentive to the completion date (i.e., complete your HRA by April 30th and earn $50).
  • Be aware of legal guidelines or regulations that will affect the incentives you offer.  What HIPAA does with premium differentials is a good example. Under HIPAA, employers may offer up to a 20% discount on health insurance premiums for participation in wellness programs. And encouragingly, under the new PPACA legislation, beginning in 2014, that amount can be increased to 30%, and may be increased to 50% at the discretion of the Secretary of Health and Human Services. Of course, the wellness programs must meet certain requirements to qualify: they must be voluntary and non-discriminatory, and they must provide reasonable alternative standards to receive the discount for those who are physically unable to achieve the program milestones.

Next week, I’ll share another best practice which stresses incentives relevance and value to employees.

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