Incentives Can Be Tricky Business

This Wall Street Journal article highlights what many employers with a health management program already know: incentives can be tricky business. Financial incentives may get more employees to complete health assessments, but will they get employees to lose weight? And will employees feel coerced, rather than encouraged, to improve health habits? Now, in addition to the questions of how to structure incentives to achieve desired goals, employers also have to worry about whether the programs will invite legal or ethical complaints. Two lawsuits have been filed by the EEOC against employers using health management incentives, alleging violations of the Americans with Disabilities Act. At the same time, the federal government has signaled approval of the use of incentives by raising maximum incentive amounts under the ACA. Financial incentives have been shown to improve participation rates. To avoid alienating employees -- and potential lawsuits -- employers need to make sure to offer enough alternatives so that all employees are capable of earning the incentive if they choose to take action.

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Beth Umland
by Beth Umland

Director of Research, Health, Mercer

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