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Financial rewards for employee healthy behavior

Evidence Rating

Some Evidence

Health Factors

Employers can offer payments, vouchers, credits toward health insurance premiums, or other financial rewards to encourage employees to lose weight, eat more healthily, quit smoking, engage in physical activity or other healthy behaviors. Employees may earn these rewards for joining health programs, engaging in selected activities, or meeting physical standards ().

Expected Beneficial Outcomes (Rated)

  • Improved attainment of short-term health goals

Other Potential Beneficial Outcomes

  • Improved weight status

  • Reduced employer health insurance costs

  • Reduced absenteeism

Evidence of Effectiveness

There is some evidence that offering financial rewards for healthy behavior helps employees reach short-term health goals (, Volpp 2008, Cawley 2011a, O’Donnell 2012). Additional evidence is needed to confirm long-term effects (O’Donnell 2012, ).

Rewards increase program participation and can help employees reach short-term health goals in some circumstances (O’Donnell 2012). Workplace interventions offering financial rewards for weight loss can result in modest weight loss after one year, although such programs often have high attrition rates (Cawley 2011a). Financial incentives can encourage more weight loss than program participation without incentives (, Volpp 2008). Effects appear strongest for larger rewards and rewards delivered soon after participants complete the target behaviors ().

Poorly constructed programs, however, may encourage gaming or unhealthy behavior (NIHCR-Tu 2010), and can increase disparities in health care coverage if they penalize disadvantaged persons less able to reach health goals (Volk 2012). Financial incentives may also undermine motivation to continue healthy behaviors once rewards end (). Experts therefore suggest pairing rewards with health programs that encourage participation, progress towards health goals, and lifestyle change (Volk 2012).

Workplace wellness initiatives that include financial rewards for healthy behavior can generate cost savings; savings result from reduced absenteeism, lower use of health care services, or reduced workers compensation and disability claims, and generally begin two or more years after implementation (Volk 2012).

Impact on Disparities

Likely to increase disparities

Implementation Examples

As of 2014, employers may reimburse employees up to 30% of the cost of their coverage if they reach defined health targets. The Health Insurance Portability and Accountability Act (HIPAA) requires that employers offer reasonable alternatives for employees medically unable to reach those targets (Volk 2012).

Implementation Resources

O’Donnell 2012 - O’Donnell MP. Financial incentives for workplace health promotion: What is equitable, what is sustainable, and what drives healthy behaviors? American Journal of Health Promotion. 2012;26(5):iv–vii.

CDC-WHP - Centers for Disease Control and Prevention (CDC). Workplace health promotion (WHP): Toolkit on how to design, implement, and evaluate effective workplace health programs.

Citations - Evidence

* Journal subscription may be required for access.

O’Donnell 2012 - O’Donnell MP. Financial incentives for workplace health promotion: What is equitable, what is sustainable, and what drives healthy behaviors? American Journal of Health Promotion. 2012;26(5):iv–vii.

Marteau 2009* - Marteau TM, Ashcroft RE, Oliver A. Using financial incentives to achieve healthy behaviour. BMJ. 2009;338:b1415.

NIHCR-Tu 2010 - Tu HT, Mayrell RC. Employer wellness initiatives grow, but effectiveness varies widely. Washington, DC: National Institute for Health Care Reform (NIHCR); 2010. Issue Brief No. 1.

Volk 2012 - Volk J, Corlette S. Premium incentives to drive wellness in the workplace: A review of the issues and recommendations for policymakers. Washington, DC: Georgetown Health Policy Institute (HPI), Georgetown University; 2012.

Cawley 2011a - Cawley J, Price JA. Economic aspects of obesity, Chapter 4: Outcomes in a program that offers financial rewards for weight loss. In: Grossman M, Mocan NH, eds. Economic Aspects of Obesity. Chicago: University of Chicago Press; 2011:91-126.

Volpp 2008 - Volpp KG, John LK, Troxel AB, et al. Financial incentive - Based approaches for weight loss: A randomized trial. Journal of the American Medical Association. 2008;300(22):2631–7.

Paul-Ebhohimhen 2008* - Paul-Ebhohimhen V, Avenell A. Systematic review of the use of financial incentives in treatments for obesity and overweight. Obesity Reviews. 2008;9(4):355–67.

John 2011* - John LK, Loewenstein G, Troxel AB, et al. Financial incentives for extended weight loss: A randomized, controlled trial. Journal of General Internal Medicine. 2011;26(6):621–6.

Citations - Implementation Examples

* Journal subscription may be required for access.

Volk 2012 - Volk J, Corlette S. Premium incentives to drive wellness in the workplace: A review of the issues and recommendations for policymakers. Washington, DC: Georgetown Health Policy Institute (HPI), Georgetown University; 2012.

Date Last Updated

Jan 10, 2014