Outcomes-Based Wellness Incentives on the Rise, Defined Contribution Under Consideration, bswift Study Finds
CHICAGO, IL — Thursday, May 22nd, 2014
bswift, a leader in cloud-based technology and services for employee benefits and health exchanges, has released its annual benchmarking study, conducted in conjunction with Employee Benefit News. bswift’s fifth annual study covers the journey that employers are making, from centralized control over health insurance and other benefits toward shifting ownership to their employees. This year’s study reveals a number of trends across three benefits topics in varying states of maturity: defined contribution (in its infancy); wellness programs and incentives (moving into adolescence); and employee self-service and automation (at the most mature end of the spectrum).
The study was based on the results of an online survey conducted among 388 benefits decision makers at organizations (of 50 or more employees) that offer health benefits. For both large employers (more than 500 benefits-eligible employees) and smaller employers (50 to 500 benefits-eligible employees), the top wellness program components are biometric testing and health risk assessments (HRAs). Of companies with wellness programs, the percentage of companies that offer incentives (83% of large employers and 78% of smaller employers) showed a significant boost from 2013 – with health insurance premium discounts or credits representing the primary incentive type.
Perhaps the most significant finding is the rise in the adoption of incentives that are based on measurable results. Nearly one quarter of large employers with wellness programs now provide outcomes-based incentives for employees who meet or exceed biometric thresholds, and almost half are considering this approach for 2015.
According to Brad Wolfsen, Executive Director, bswift Exchange Solutions, “As CFOs and HR leadership focus in on wellness program ROI, employee accountability and outcomes-based approaches that tie dollars to employee health improvements will become more commonplace.”
On the downside, while employers expanded wellness programs and increased incentive amounts in 2013, participation rates decreased, with fewer employers achieving rates above 50%. For HR leaders, the result underscores the challenge of maintaining employee engagement in wellness while faced with rising corporate economic pressures and communication demands created by rapid regulatory changes.
Despite all the media attention paid to defined contribution, employers have been slow to adopt this new approach. More large employers are considering defined contribution (18% – up from 14% last year), the vast majority for medical benefits only. However, less than 1% of employers actually implemented the strategy for 2014 and it is likely that the adoption rate will remain low for 2015 as well.
Employee self-service and automation saw the slowest growth in the past year, with some benefits enrollment functions trending in the wrong direction. Specifically, almost 30% of large employers lack an online enrollment process for new hires and still rely heavily on paper and manual processes. This finding is surprising, given the availability of cost-effective technology.
“The rise in public and private exchanges has created a clear shift in organizations’ approach to health care, and the prediction is that the transition to more widespread self-service and automation, outcomes-based wellness initiatives and adoption of defined contribution will accelerate,” said bswift CEO Rich Gallun.
bswift is changing the world of benefits administration by combining deep expertise and a passion for technological innovation with a unique consumer-driven approach. Partnering with enterprises nationwide and serving millions of employees, bswift offers cloud-based technology and services for online enrollment, interactive decision support, ACA compliance reporting and employee engagement. bswift also provides access to consumerism, product and consulting solutions needed to build a benefits program specialized for both employers and employees alike. For more information about bswift, an Aetna company, visit www.bswift.com.
MEDIA CONTACTEmma Frutkin