What Is Incentive Wellness and How to Design It?

A wellness incentive programs reward employees for participating in healthy activities that promote their physical wellness, mental wellness, and overall well-being. By incentivizing healthy behaviors from employees, companies can reduce the health risks and costs associated with treating employees.

This wellness incentive program guide will allow HR to create healthy wellness incentive programs for their company employees.

1.0 What are wellness incentives?

Wellness incentives are the rewards that an employer provides when an employee completes certain wellness activities. These rewards could be of various forms, such as money, gift cards, time off, or points that the employee earns and can redeem.

These incentives can be tied to various wellness activities, such as:

• completing biometrics,

• fitness classes,

• or utilizing mental health resources.

If created properly, these programs will encourage employees to participate in these activities and ultimately lead to healthier lifestyles for these employees.

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1.1 Why employee wellness programs matter?

Employee wellness programs improve both individual health and organizational results.

• They can significantly reduce the health risks and chronic conditions that otherwise affect employees, leading to fewer sick days and lower costs associated with healthcare.

• Employees will feel more engaged and satisfied with their jobs, as the company cares for their lives and their well-being.

• There will be an improvement in the productivity of the employees, as they will have fewer absenteeism days, thus providing a return on investment for the companies.

• The access to mental and physical health resources will further increase the employee experience and add to the company's long-term performance.

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2.0 Types of wellness incentives

Workplace wellness incentives generally fall into clear categories that employers can mix based on workforce needs.

• Financial incentives include premium reductions, HSA contributions, cash rewards, or gift cards that employees earn for completing activities such as biometric screenings or smoking cessation programs.

• Activity based rewards cover gym memberships, fitness classes, step challenges, and group challenges where teams compete and earn points or prizes.

• Time-based options give paid time off or flexible work hours, so employees can attend wellness activities during work hours or focus on personal health.

• Recognition and points systems let employees earn points for healthy activities that they later redeem for rewards, building ongoing motivation.

• Outcome focused incentives reward progress on goals such as improved biometric results or successful participation in stress management and nutrition programs.

CompXL® enables organizations to manage and communicate employee reward programs as part of a comprehensive total rewards strategy. It helps HR teams administer different types of employee rewards while maintaining consistency across compensation programs.

3.0 How do you design an effective workplace wellness incentive program?

Start with clear goals and simple rules that make it easy for employees to participate and succeed.

• Survey employees to find out what motivates them and gives incentives according to their physical and mental health needs.

• Include both participation in activities (that cannot be skipped) and optional goals based on the outcomes of those activities.

• Ensure that the goals are certain and realistic to all employees and that the program is easy to find and use.

• Try to include as many family members as possible in these programs, as they may have different needs regarding smoking cessation programs, nutrition, and stress.

• Track the employees' participation in the program from the beginning to adjust incentives as needed.

3.1 Wellness incentives examples

Practical examples help HR teams see how incentives work in real settings.

• Employees complete biometric screenings and earn discounts or HSA contributions that reduce their healthcare costs.

• Teams compete against other departments in fitness challenges and earn gift cards or time off work.

• Employees complete smoking cessation or stress management programs and earn cash rewards or additional vacation days.

• Employees use company gym memberships or classes and earn monthly rewards.

• Employees complete nutrition or mental health programs and earn recognition or flexible scheduling.

4.0 How do you measure, improve, and sustain a wellness incentive program?

Measurement turns a good program into a lasting one that continues to deliver value.

• Use data on participation, biometrics, absenteeism, and healthcare costs to determine the effectiveness of your wellness program.

• Use employee feedback to make changes to wellness rewards to encourage continued participation in the program.

• Use data to make changes to the program to ensure continued motivation and fairness in relation to program rewards.

• Share the successes of the wellness program with the leaders of the company to encourage their support of the initiative.

• Incorporate the wellness program into the company and employee experience to encourage participation and ensure the long-term success of the initiative.

5.0 FAQs

Here are some FAQs for better understanding.

5.1 What qualifies as a wellness benefit?

A wellness program typically includes activities or rewards for employees that focus on improving their health. Examples may include biometric screenings, fitness programs, smoking cessation programs, mental health programs, and health and nutrition programs. These programs are required to be voluntary and to have limits on the incentives that are provided to employees as part of federal regulations.

Furthermore, only certain medical expense reimbursements are provided with preferential tax treatment while general wellness program benefits are taxable to the employee.

5.2 What is a motivational incentive?

A motivational incentive is any type of reward that is given to employees to encourage them to perform some positive action. In the workplace, incentives may include cash incentives, gift cards, time off, or other types of recognition.

Employers use incentives to encourage employees to participate in wellness programs, and to encourage those employees to generally feel better in their daily lives.

5.3 What is the 3-3-3 rule in mental health?

The 3-3-3 rule is a technique used to help individuals who are suffering from anxiety or stress. The individual is to look at three things, hear three sounds, and touch three parts of the body. UCLA Health states that this rule allows individuals to focus on the present moment, rather than the thoughts that are causing their anxiety, thus calming their mind.