The Wellness Incentives Workbook

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A step-by-step approach to...

Smart incentive strategies

Best practices

Complying with healthcare reform

Dodging pitfalls

The Wellness

Incentives

Workbook

NEW EDITION

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2 Rewards Workbook

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How to Use This Workbook

This hands-on workbook will help you prioritize

and plan for the future. We’ve pulled together

helpful checklists of the elements that have been

proven to help wellness incentives programs

succeed. And to back up those lists, we offer

data from our own book of business—the results

of a year-long, 52-client, 2 million-person study

on wellness incentives best practices.

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By the time you’ve gone through these pages,

you should feel pretty confident that your

rewards program is based on proven best

practices rather than guesswork.

If your organization offers incentives to people who meet

certain wellness criteria, you’re definitely on track with other

progressive employers and health plans.

1

But now that

incentives are a standard part of wellness programs,

expectations around engagement, accountability, and

outcomes have grown—and so has complexity. And when

things get complicated, it’s easy to miss important details,

even for professionals who are on top of their game.

Let

's get started

!

Ready?

SEE PAGE

17 Affordable

Care Act?

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TODAY, NEARLY

who meet specific wellness criteria

3

90%

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1. Have You Covered the Basics?

Catch those head-slappers early! You may be well past the planning stage,

but it never hurts to make sure you haven’t missed anything important.

Program Planning & Preparation

YES?

Notes:

Your organization has clear wellness objectives that your team understands and can get behind. Your incentives design directly supports your overall wellness objectives.

Your incentives program is aligned with your benefits plan.

You have strong management support for your wellness and incentives programs. Your incentives program is simple enough for your population to understand right away. You’ve agreed on what requirements you’ll use.

You require a completed health assessment as a basis for your incentives program. You’ve established how long people will have to earn the reward.

You have a plan to handle exceptions.

You’re confident that the overall participant experience is positive.

You have a plan for new employees, members, and family members to participate. You have an approved budget for your incentives program.

You’ve explored cost-neutral approaches (premium reductions for participants are offset by additional premiums for non-participants).

You’ve weighed the pros and cons of self-reported and imported data. You know what sources of imported data will be accepted.

You’ve decided how and when you’ll measure improvement toward your goals.

You have baseline measurements that you can use to compare population health status, health risk levels, and healthcare costs before and after you start your incentives program.

You’ve made sure your incentives plan is compliant with ACA regulations.

Clients with simpler incentive

programs have coaching

engagement rates 7%

higher than those with

complex programs.

4

see aca limits on page

SIMPLER IS BETTER

FOR HIGHER ENGAGEMENT.

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2. Build a Culture of Health

While people respond well to rewards such as cash or prizes, incentives are just

one element in motivating people to improve their health and healthcare usage.

The wellness culture in your organization is a big part of what motivates lasting change.

In our incentives study, clients who identified themselves as having a strong

wellness culture saw an average 7% higher health assessment completion rate than those

with a weak or moderate culture; clients with strong management support saw a 5%

improvement.

5

_{Health plans that demonstrate a strong wellness culture from the top down}

have significantly higher participation rates.

Leadership

Policies

Benefits

Environment

Communication

Incentives

Programs

$

Your executives make a point of taking part in the wellness program & communicating about it. Your organization’s policies explicitly promote wellness & encourage healthy choices. Your wellness program is an integral part of your overall benefits design; wellness doesn’t operate in a silo.

Your environment encourages healthy choices & activities.

You communicate about the wellness program often and through multiple channels. The messages are inspiring and consistent. Your incentives design matches your organization’s principles as well as the values of your employees or members.

Programs reinforce wellness as a shared expectation.

DOWNLOAD NOW!

WANT MORE

ON CULTURE?

Get our Handbook of

Wellness Culture Ideas!

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3. Is Your Population Ready?

If incentives are new to your population—or if your program is changing—you may hit resistance.

That’s not a show-stopper, but best practices include laying groundwork before you launch.

Participant Readiness & Experience

YES?

Notes:

Your members or employees are engaging with your wellness program.

Your employees or members are willing to change their lifestyle habits for the better. Incentives have successfully encouraged participation in other initiatives.

You’ve tested your program design with people outside your immediate team to gauge response.

You’ve talked to your wellness program vendor for examples of similar designs and the experiences of other organizations like yours.

Everyone is able to participate in your incentives program, including those with health issues or disabilities.

You’re confident that your requirements aren’t so challenging that people decide it’s not even worth trying.

Your design includes reasonable alternatives for those who aren’t able to fulfill the requirements.

Have you tried member or

employee focus groups?

REQUIRED BY

THE AFFORDABLE

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4. Are You Ready to Communicate Your Plan?

The tricky thing about communication is that telling people once or twice—or even three

times—isn’t enough. Let’s make sure people know about your incentives program and

understand how to participate.

Communications Strategy

YES?

Notes:

You’ve developed your communications strategy, with a full-year plan laid out. Your program is simple to communicate.

You have wellness communications plans in place that you can use to explain your incentives plan to your population.

Your calls to action are clear and simple so people know what they’re supposed to do next. You have multiple communication modalities (email, snail mail, posters, weblets)

and messages so you reach everyone.

You can target messages to specific segments of your population, such as those who haven’t completed their health assessment yet or those with certain health conditions or risks.

You’ve thought about how you’re going to communicate to everyone, in different locations and job functions.

You communicate about the reasonable alternatives you’ve put in place for those

who can’t fulfill the standard requirements.

SEE PAGE

REQUIRED BY

THE AFFORDABLE

CARE ACT!

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Want More Participation?

Communicate, Communicate, Communicate

An independent research study found that many employees and health plan

members are completely unaware that they have access to wellness sites. In fact,

51% of those eligible for employer-sponsored sites and 40% of those eligible for

health plan-sponsored sites don’t know it. No matter how many innovative

incentives or cool tools you offer, if people don’t know about them or they’re hard

to find, they won’t engage.

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By focusing on raising awareness and ease of access, companies and health

plans that currently have low participation in wellness programs can engage

more members or employees without necessarily making expensive investments

in rewards or software upgrades.

AWARENESS OF EMPLOYER-SPONSORED

HEALTH INFORMATION SITES

AWARENESS OF HEALTH PLAN-SPONSORED

HEALTH INFORMATION SITES

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Health Coaching Engagement Rate

Health Assessment Completion Rate

Strong Communication Gets Results

7 Companies that ramped up wellness-related emails saw an increase in both

health assessment completions and coaching engagement rates.

3 0 3 5 4 0 4 5 5 0 5 5 6 0 Few Incentive-Related

Communications A lot of Incentive-Related Communications

55%

50%

40%

33%

15% INCREASE

17% INCREASE

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ACCORDING TO BEHAVIORAL ECONOMICS

people may be more

penalties

or

surcharges

MOTIVATED

than to make equivalent gains.

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5. What Type of Incentives?

Incentives can be rewards for meeting certain requirements—or penalties for not meeting

them. Either can be effective, depending on your population and your organizational culture.

Your responses to these prompts can help you decide the right approach for your population.

Carrot or Stick

YES?

Notes:

Based on previous experience, you know how your population will respond to a reward for action or a penalty for non-action.

You’re prepared for the possibility of negative reactions.

You’re confident that your approach fits within your organization’s overall culture. You’ve researched rewards and how they’ll be paid.

You’ve discussed who will be eligible and you have management support. Your reward is enough to prompt behavior change.

You’ve planned for increases or new options year-over-year to keep people interested.

SURPRISING FACT: For incentive amounts less than $500, offering rewards in the form

of an insurance premium discount results in completion rates 14% to 16% higher than

those paid in cash.

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Premium reduction? Cash?

HRA/HSA/FSA

contribution?

Tiered health plan choices?

Drawings or raffles?

Community-based

rewards or charitable

contributions?

Group or

team-based rewards?

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WHS_square_RGB_final.eps 11/26/2013 webmdhealthservices.com 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0 $25-$249 $250-$499 $500+

Insurance premium discount

Cash (or cash equivalent)

Health plan upgrade

48%

62%

67%

66%

51%

34%

28%

74%

76%

Health Assessment Completion Rates

by Type and Amount of Incentive

10 For rewards over $250, health

plan upgrades achieve the

highest health assessment

completion rates.

Account-based incentive

deposits are becoming

more common and we

expect that employers will

continue to focus on this area.

WHAT ABOUT HEALTH

ACCOUNT CONTRIBUTIONS?

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Changing Incentive Strategies Can Have Big Impacts

We looked closely at clients whose health assessment completion results changed significantly between

2010 and 2012 and analyzed what those companies did differently.

11

_{Increasing or decreasing incentives}

affects engagement. But changing communications and management support can achieve the same end.

Client

_{Completion Rate}

2010 HA

_{Completion Rate}

2012 HA

Change

What’s Different?

1 28.0%

53.9%

25.9%

Same incentive ($300), but

_{increased communication level}

Increased incentive from $120

to $500

Increased incentive from $310 to

$700; increased management support

Increased incentive from $150 to $350;

increased management support and

culture of health

Same incentive ($100), but

increased communication level

Same incentive ($240), but

decreased communication level

Same incentive ($1,200), but

decreased communication and

management support

Decreased incentive from $400+ to $0,

and decreased communication level

22.8%

14.9%

13.7%

11.6%

-11.2%

-26.7%

-36.8%

50.6%

73.4%

72.5%

87.4%

29.3%

43.0%

34.8%

46.4%

43.2%

32.0%

84.3%

57.6%

55.6%

18.8%

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3

4

5

6

7

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76% of U.S. adults who volunteer report

that volunteering has made them feel

physically healthier, and 78% report

that volunteering lowers stress levels,

leading to feeling better than adults

who do not volunteer.

13 Community-Based Rewards

What Do Community-Based Rewards Look Like?

Our clients reward for a variety of

community-oriented activities, including:

• Volunteering

• Donating to charitable organizations

(including food banks)

• Participating in blood drives

• Participating in community wellness

and fitness events, such as fun runs or walks

In a study of the WebMD Health Services book of business, we found

that employers that include community-based activities in their reward

programs have higher average job satisfaction scores and higher average

life satisfaction scores than employers that don’t include the community

in their reward programs.

If your population includes a high proportion of Millennials, consider

community-oriented rewards. A 2006 survey of Millennials showed that 79% want

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Impact of Community-Based Rewards

We studied job and life satisfaction health assessment scores from two groups of employers

in the WebMD 2013 book of business: employers that offered rewards for community-based

activities and those that did not (specifically, those that didn’t track these type of rewards within

their WebMD sites). In 2013, 17% of our employer clients offered these programs.

Here’s what we found.

COMMUNITY REWARDS &

JOB SATISFACTION

Health Assessment Question:

“In general, I am satisfied with my job”

COMMUNITY REWARDS &

LIFE SATISFACTION

Health Assessment Question:

“In general, I am satisfied with my life”

29 or less

% OF USERS BY AGE GROUP

who agree/strongly agree

% OF USERS BY AGE GROUP

who agree/strongly agree

30-39

40-49

50-59

60+

30-39

40-49

50-59

85.2% 83.5% _83.3% 80.9% 82.3% 82.3% 84% 84.6% 90.8% 90.8% 90.9% 92.2% 92.1% 90.6% 90.5% 88.4% 89.2% 89.3% 81.3% 81.9%

60+

Clients Without Community-Based Rewards

Clients With Community-Based Rewards

In both cases, the greatest difference in job and life

satisfaction between clients that reward for community-based

activities and those that don’t is seen in the younger

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PROGRAM

OBJECTIVES

5. What Stage Are You In?

When it comes to incentives, you can’t just leap into the deep end. You’ll be less stressed

and more successful if you wade in and work through each stage until your population is

ready for the next step.

AWARENESS

ACTION

BEHAVIOR CHANGE

Health Contingent

Activity-Only Outcomes-Based

Participatory

What have you already done/what’s in your plan?

+

=

– Health Assessment

– Biometric Screenings

– Spouse/Dependents

– Interventions & Challenges

– Improvement Programs

– Wellness Changes

– Smoking Cessation

– Weight Management

– Non-Smoking

– In-Range BMI

– In-Range Cholesterol

– In-Range Blood Sugar

– In-Range Blood Pressure

– Managed Condition

On average, clients who reward spouses/dependents for health assessment

completion achieve rates 39% higher than those who don’t offer incentives.

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ACA definition of

or undertake more than a similarly

situated individual based on a health factor

health contingent”

when people need to satisfy a standard related to a health factor

incentives:

IN ORDER TO EARN A REWARD.

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6. Are You in Line with ACA Guidelines for Incentives?

The Affordable Care Act has broad implications for wellness incentives programs, especially

outcomes-based rewards. Here’s what it looks like at a glance.

If you want to reward for:

You have this

_{type of program:}

Frequency of reward/

_{penalty is:}

The maximum

_{reward/penalty is:}

A reasonable

alternative standard

may be required:

Additional

requirements for an

alternative standard:

Health assessment completion Participatory Any time No limit No alternative needed Not required for _{participation} Biometric screening

Education program Gym cost reimbursement Tobacco cessation program (regardless of success) Preventive care (waive copay/ deductible)

Exercise, walking, or diet

program participation Activity-only At least once per year

30% of total cost of coverage

If the program standard is medically inadvisable or unreasonable due to a medical condition

• Physician verification of medical condition allowed • Must accommodate physician recommendation

Health coaching/ condition management participation Biometric outcomes (being within value range, meeting a certain number of metrics, or improving measured by percent change)

Outcomes-based At least once per year 30% of total cost of coverage

Yes, for any individual who does not meet initial standard

• Physician verification of medical condition not allowed • Must accommodate physician recommendation • Must allow another reasonable alternative based on physician recommendation if requested

New regulations apply to plan years

BEGINNING JANUARY 1, 2014.

Tobacco cessation

programs limited

to 50% of total

cost of coverage.

Tobacco-free status rewards limited to 50%

of total cost of coverage.

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7. Are You Ready for Outcomes-Based Rewards?

Every rewards program should evolve over time,

and we recommend starting with activity-based rewards.

Outcomes-based rewards are growing in popularity, and they may move the needle

on defined risk areas. But we still need more year-over-year data industry-wide

to see whether they effectively drive lasting outcomes. Currently, 15% of our health

plan clients and 22% of our employer clients have implemented outcomes-based

rewards. Across our book of business, 18 clients are using at least five

outcomes-based activities.

HOW TO USE THEM

Tailor your outcomes-based programs to the proven needs of your specific

populations so you can target the underlying causes of your rising health costs.

For example, if one of your population segments tends to have a high aggregate

BMI, you can tailor rewards specifically to those people over the course of

a program year to help them progressively achieve healthier weight targets.

WebMD Personalized Rewards help you get the most out of outcomes-based

rewards by showing each person a graph of where they stand now and where they

need to go. Their progress is updated over the course of the program year.

BEST PRACTICE:

Don’t roll out

outcomes-based

rewards across the

board. We’ve seen

that OBRs work best

when they target

defined risk areas.

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DON’T LEAP TOO SOON!

(MASTER PARTICIPATORY

INCENTIVES FIRST)

IT SOUNDS LIKE

YOU’RE READY!

How long has your incentives program been in place?

Has your population responded positively to wellness incentives?

Have they accepted that they have to do more to earn incentives each year?

Have you reached your participation, engagement rate, and outcomes targets so far? If not, what’s holding you back?

Will requiring individuals to meet a certain biometric value or range be seen as reasonable, or as a larger barrier to participation?

Does your budget support biometric screenings?

Can the screening vendor bill for screenings as a plan cost rather than a separate investment?

Can you manage reasonable alternatives for individuals who can’t meet wellness goals? Have you developed communications to explain reasonable alternatives?

Are you confident that your program is set up to help people with higher health risks improve their health, rather than shifting costs to them?

Have you factored in financial and time burdens when determining the specific standard someone is asked to meet to ensure it is medically safe?16

Will your incentives strategy place a greater economic burden on one race or ethnic group of employees or plan members than another?17

JUST GETTING STARTED

NOT AS I EXPECTED

NOT COMPLETELY

NO

INCENTIVES? COMMUNICATIONS?

NO

WAY

NO

NO/NOT SURE

NOT

YET

NOT

YET

NEED TO LOOK INTO THIS

HADN’T THOUGHT OF THIS

HMMMM, THAT’S A TRICKY ONE

TWO YEARS OR MORE

YES

NOTHING

ACHIEVABLE

YES

GOT IT COVERED

YES

WE’RE GOOD

WE’RE SET

CHECK

See which side you fall on to know if you’re

ready to make the jump.

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The Impact of Incentives on Participation,

Activity & Outcomes

18 Coaching & Incentives

Moving from no incentive for health

coaching to having a coaching

incentive raised coaching

engagement by 21%.

Biometric Screenings & Coaching

Clients that include incentives for completing a biometric

screening achieve screening rates 29% higher than clients

that don’t offer those incentives.

21%

No Biometric

Screening Incentive

Biometric Screening

Incentive Offered

9.6%

38.3%

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8. Bonus: Have You Dodged These Common Pitfalls?

Overcomplicated program

The incentive IS the goal

Unattainable

goals

Focus on “prizes”

Penalties that hurt morale

P I T FA L L S

C O N S E Q U E N C E S

Y O U ’ V E D O D G E D A B U L L E T I F. . .

People become overwhelmed by too many options or requirements to earn a reward and stop participating.

You can explain your program in a couple of quick sentences.

Short-term rewards reinforce long-term behavior change.

Rewards are set up to let people start small and build on their successes over time.

Rewards reinforce your overall wellness program goals and your organization’s health culture.

People want to participate because your wellness program makes them feel good about themselves and their health. People do enough to earn the reward,

but don’t make lasting changes to their health.

If the goals that people need to meet seem unattainable, they may not even try.

Prizes and giveaways may not drive sustained health changes.

You lose your population’s trust.

!

✓

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Can your vendor provide complete

program support?

Integrated health assessment

Integrated lifestyle improvement, condition

management, and disease management programs

Integrated health coaching

Personal health record

Trackers for biometric data (e.g., blood pressure)

Support for spouses and dependents

Does your vendor meet your needs for program

flexibility and configurability?

Points-based

Action-based

Combination points

Supports outcomes-based requirements

Allows flexibility for outcomes-based metrics

requirements and progress against goals

Can import data from offline activities,

self-reported, and professionally imported

Meets required privacy and security standards

Supports different programs for different

groups or population segments

Can your vendor meet your rewards fulfillment requirements?

Vendor agnostic

Payroll interface

HSA custodial banks

FSAs

TPAs

Prepaid cards

How straightforward is the interface for both individuals

and program managers?

Online and phone support

Single interface for individuals

Dashboard for managers

Offers engagement services

Integrated messaging platform

Support for mobile interface for users

Sophisticated, 24/7 access to reports

Can your vendor support your program as it evolves over time?

Vendor has discussed next stages with you

and knows what it will require

Vendor’s systems support your tracking

and payout design

Vendor knows and can meet new ACA regulations

Vendor has experience implementing effective

outcomes-based programs

9. Can Your Wellness Incentives Vendor

Support All Your Needs?

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