But participation in those programs is generally weak, and the effects on costs and outcomes are unclear.
More employers, such as CVS, are looking toward more muscular ways to get workers on board and ensure that the programs push workers to meet meaningful health benchmarks rather than simply participate.
Last year, the city of Chicago adopted a wellness program that penalizes city workers and spouses or domestic partners covered under their health plans $50 a month each if they choose not to participate. Mayor Rahm Emanuel called it the largest municipal wellness program in the U.S. and is counting on it to save the city $20 million a year in health costs.
A city spokeswoman declined to describe how the figure was calculated. Banking on wellness programs to make a significant dent in the cost of benefits, though, assumes that the programs will deliver quick returns, So far, they have not.
Wellness programs traditionally have been structured with incentives worth a few hundred dollars a year in cash or merchandise, contingent upon undergoing health screening or participating in programs promoting healthy behavior, such as exercise or smoking cessation.
“If you talk to executives today, they'll probably mostly tell you that wellness programs will be cost-neutral in terms of medical costs, but they give more of a motivation to stay healthy to the workforce,” said Dr. Soeren Mattke, a senior scientist at RAND Corp. Generally, experts say a good return on investment is if a company saves $3 on their health costs to every $1 spent on a wellness plan, Mattke said.
More than 90% of employers with at least 200 employees have a wellness program, according to a report that Mattke and two RAND colleagues delivered to the U.S. Labor Department in 2012. The report notes a dearth of nationally representative data on participation, but alludes to a 2010 survey suggesting that fewer than 20% of eligible employees participate.
In a recent survey by the National Business Group on Health, 36% of the responding employers said they plan to penalize employees if they don't meet certain wellness standards in 2014. That's compared with 18% that said they would in 2013.
In Chicago, more than 47,000 city workers and their partners are eligible for the program and 85% have enrolled, according to American Healthways Services, the vendor the city hired to implement the program. Chicago agreed to a four-year contract with Healthways worth up to $24 million for the Franklin, Tenn.-based company, depending on participation.
The city's labor unions also had to sign off on the plan, and they played an important role in communicating with workers and helping them register. “When you have skin in the game, people are going to do it,” said Scott Adams, director of outreach and employee benefits for the American Federation of State, County and Municipal Employees Local No. 31 in Chicago.
Mattke and his colleagues at RAND are finishing a new study on wellness incentives. Those findings will be delivered to Congress in the coming weeks as the federal government prepares its final rule on wellness programs under the Patient Protection and Affordable Care Act.
The healthcare reform law may fuel the use of stronger incentives to push employees to participate. The law increases a limit on the value of incentives to 30% of the cost of health coverage—or as much as 50% for incentives tied to tobacco use.
Helen Darling, president and CEO for the National Business Group on Health, praised approaches that offer employees perks in new health plans that require participation in a wellness program, while allowing workers to remain in their current plan.
BJC HealthCare, a St. Louis-based health system, took that approach and the results were mixed, according to a study published recently in the journal Health Affairs. Hospitalizations for chronic illnesses—such as heart disease and chronic obstructive pulmonary disease—declined about 41% between 2004 and 2006. Outpatient costs, however, increased almost as much as hospital costs fell.
Mattke said researchers attempting to draw conclusions about the success of wellness programs sometimes fail to take into account a variety of other things that companies do to promote healthier lifestyles. They include stocking healthier selections in vending machines, installing bicycle racks and offering discounts on gym memberships.
Many company executives are too focused on the financial impact rather than transforming an unhealthy workplace, said Elisa Mendel, national vice president for HealthWorks, the division of Kaiser Permanente that creates and implements wellness programs.
Doughnuts are occasionally served in her meetings with executives asking her about the cost of rewarding employees for quitting smoking, losing weight or following through on a doctor's appointment.
“Are you socially supporting your workers to make the right lifestyle changes?” Mendel said. “These things are more important in terms of getting them to change their lifestyles.”