The “Carrot & Stick” Approach to Wellness

A recent article on talked about the idea of using disincentives to encourage employees to take better care of themselves.  To this end, some companies have started using a “stick” rather than the” carrot” approach to wellness.

Instead of offering financial incentives (i.e., “carrots”) to employees who meet certain wellness goals, the companies are trying disincentive strategies to motivate employees toward their wellness goals.

According to the article, research suggests that employers can only incentivize workers up to a certain dollar amount (i.e., $350 per year) before the investment stops paying off – and doubling the investment won’t reap double the participation.

Two companies that are trying the disincentive approach are StickK and Life Vest Health.

Users on StickK’s website set wellness goals for themselves and then sign a “commitment contract.”  StickK takes the user’s credit card number and charges the card a set amount every week that users don’t achieve their set goal.

LifeVest Health’s strategy works like a stock tied to a person’s individual health (i.e., biometrics such as weight and blood pressure).  The “stock” goes up when the person gets healthier and drops when he/she doesn’t.

Some employers link participation in wellness programs to employees’ costs for health coverage, by reducing premium contributions for workers who are in wellness programs, or by reducing the amounts they must pay in deductibles and copayments when they obtain health services.

HR POINTER:  Whether a company uses a “carrot” or a “stick” approach to wellness, the methodology should not be limited to the employee alone.

When designing wellness programs, most employers concentrate on the employee and offer little or no incentives for the employee’s spouse or children.  As such, companies miss at least 50% of the population that can adversely impact premiums by excluding the significant others of employees from wellness programs.

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