Why Your Company Will Pay You for a Healthier Lifestyle

By Paula Santonocito

smw - why your company will pay you for a healthier lifestyleIf your company has recently offered you a financial incentive to adopt a healthier lifestyle, don’t take it personally. Paying workers to take better care of themselves is a growing trend.

And yes, it is legal, provided the incentive program doesn’t single out individual employees.

Why Companies Offer Incentives

Although the concept may seem odd, it makes perfect sense when you look at the bottom-line impact of escalating health care costs. Health care is a huge expense category for companies, and it’s one of the fastest growing cost categories, if not the fastest growing, at many organizations.

For years, employers have tried to address escalating health care costs other ways, by changing providers or benefits offerings, for example. But, because health care costs continue to skyrocket nationwide, employer options have been limited.

That is until now. Companies have decided to address the source: health care users. And that means employees. Healthier employees use less health care services, which, in turn, results in lower health care costs for companies.

From a financial standpoint, the impact of healthier lifestyles can be substantial. A recent study by Watson Wyatt, a leading global consulting firm, and the National Business Group on Health, a non-profit association of 285 large employers, finds that companies with highly effective health and productivity programs have cost increases that are five times lower for sick leave; four and one-half times lower for long-term disability; four times lower for short-term disability; and three and one-half times lower for general health coverage.

How It Works

What kinds of incentives are companies offering for healthier lifestyles?

The most common incentive is a reduction in health care premiums that typically ranges between $200 and $500 per year. The amount may be awarded all at once, as in applied to one premium, or credited to health care premium co-payments throughout the course of the year.

Some employers are also paying workers to participate in health initiatives: for example, $50 to complete a health risk assessment.

Program Motivation

Paying employees for healthier lifestyles is about partnering for better results–health-wise and financially.

Still, not everyone understands the connection between better health and lower premiums. Workers worry that their lifestyles may be used against them at some point. Indeed, employees have questioned whether they will they be penalized or even fired if they don’t quit smoking or lose weight.

However, organizations like the National Business Group on Health indicate that’s not the intent. Healthier lifestyles are not only good for employees from a wellness standpoint; they save companies and workers money, experts says.

A Healthier Future

Going forward, more people are likely to find their employers offering payment in exchange for a healthier style.

The Watson Wyatt/National Business Group on Health study finds nearly half of all surveyed employers currently offer or this year plan to offer financial incentives to encourage workers to monitor and improve their health. By 2009, the number of large employers providing monetary incentives is expected to exceed 70 percent.

Additional Career Articles:
Hot Careers in a Cooling Economy
Your Online Image and Your Career
Professional Associations – Should You Join One