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Employee Health Incentive 'Benefit' A Perk For Employers More Than Workers: Survey

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ATLANTA -- More employers are offering financial incentives for employees to improve their health, according to a 2012 benefits survey released Monday at the Society for Human Resource Management's annual conference -- a rare bright spot in a survey that revealed overall benefits at U.S. companies remain at the bottom of a three-year decline.

But despite the physical benefit to employees, health incentive programs may offer more financial benefits to employers than to the workers who take advantage of them, raising the question of who really wins from this type of perk.

Just as they did in 2011, employers in 2012 plan to spend, on average, 19 percent of each employee's salary on voluntary benefits, 18 percent on mandatory benefits, and another 10 percent on pay for time the employees did not work. The results reflect the ongoing weakness of the current job market, where salaries and benefits failed to keep pace with rising economic output. Seventy-three percent of respondents said the economy has negatively impacted their benefits offerings.

For companies hoping to offset skyrocketing health-care costs, which rose a whopping 6.9 percent in just the past year, employee-health incentive programs offer to pay employees to adopt healthier habits today and reduce the chances that they will need expensive health care in the future. In 2011, employers were responsible for paying 60.3 percent of the total cost of health-insurance plans for their employees.

From the perspective of an employer, health incentives make a lot of sense. Of the 550 randomly selected member companies of all sizes, the percentage that offered wellness bonuses this year climbed more than 50 percent since 2008.

Within that rise, well-known health risks like smoking and obesity were the prime targets of corporate efforts. The number of companies providing discounts on health-care premiums to employees who did not smoke more than doubled in four years to 20 percent, as did the companies offering bonuses for taking part in a weight loss program.

The key change, said SHRM's vice president for research, Mark Schmit, is that more initiative is being shown on both sides. "Until recently, many employee wellness programs were primarily made up of general education initiatives, like handing out brochures," he said. "Today more organizations are actively coming up with innovative discount programs to use as incentives -- because they work."

The release of the data comes on the eve of the highly anticipated Supreme Court ruling on President Barack Obama's Affordable Care Act. Business owners and corporations have largely opposed the law, which contains requirements for employer-sponsored health insurance that employers argue will cut into their bottom lines.