Using Financial Incentives Boosts Wellness Programs, Study Finds

Wellness programs offered by employers can mean many different things. It’s not all strict health programs. Financial incentives are also a necessary part of a comprehensive wellness program, and if applied properly are proven to be effective catalysts for positive behavioral change.

These are the findings from the report, Incentivizing Health: Unlock the Power of Financial Rewards, from IncentFit. They say that financial incentives are monetary rewards that are provided by a company with the intention of increasing motivation among employees and guiding them towards certain behaviors.

There are three common design structures for financial incentives:

• Loss aversion
• Gain-framed incentives
• Variable reinforcement

Loss aversion incentives motivate people to avoid losing out on a desired reward or benefit. The report says that people are more likely to avoid loss than they are to pursue gains. For example, a study group was given $1.40 per day for meeting a goal of 7,000 steps. Another group was given $42 a month and deducted $1.42 if their goal was not met. The loss aversion incentive had a more significant impact on physical activity than others, according to the report.

Gain-framed incentives focus on potential gain of engaging in particular behavior, emphasizing the positive outcome of completing the goal. While this can often show a lower result than loss aversion, it is still an effective path to gaining and achieving a goal.

Variable reinforcement incentives offer rewards at unpredictable intervals for certain behaviors. When positive reinforcement via feedback or rewards is given in intermittent, fluctuating periods, it has the potential to inspire persistent engagement in the desired behavior, says the study.

There are various financial incentives that can be offered including:

• Direct deposits of HSA contributions
• Reduced health care costs or premiums for completing preventative health activities
• Deposit on committing to a goal
• Gift cards
• Health-promoting prizes (Fitbits or Apple Watches, for example)
• Lotteries

Providing choice can be valuable as it gives companies the ability to see what works best in their environments. It can also be more effective than usual care or no intervention, has no detrimental effect on the employee base and can help previously sedentary adults respond favorably in initiating physical activity and maintaining it throughout the program.