Wellness programs on the rise among larger employers; financial penalties imposed on unfit employees limited, according to METLIFE study.

NEW YORK.– More than half (57%) of larger employers (those with 500 or more employees) are providing employees with a wellness program up from 49% in 2006. While the number of smaller employers (those with less than 500 employees) that offer a wellness program has remained steady the last two years at 16%, MetLife’s Sixth Annual Employee Benefits Trends Study found that nine out of ten (94%) companies, both large and small, that offer a wellness program believe they are effective for reducing medical costs. These wellness programs include different items such as smoking cessation, weight management, an exercise regimen or cancer screening. Only 9% of employers impose financial penalties on employees who do not meet wellness guidelines – a percentage that has remained steady for two years.

The study’s results also show that about four out of five employers that have wellness programs are providing incentives to encourage employee participation. Among employers that use incentives, the following motivational devices are being used:

* 40% of employers provide gyms/fitness center discounts.
* 38% of employers provide gifts and prizes.
* 27% of employers offer a reduction in employee contributions to medical plans.
* 17% of employers waive medical plan deductibles.
* 17% of employers offer additional time off.
* 14% of employers offer employees a credit towards their benefits purchases.
* 2% of employers offer cash/bonuses.

“Health insurance is not health assurance. While health insurance can offer employees important financial protection for acute medical events, most health insurance is not designed to help employees and their employers take a preventive approach to serious conditions that can often be avoided with healthy lifestyle decisions. Helping employees see the value of wellness programs can lead to improved participation, which could affect not only their own current and future finances and productivity but that of their employers,” says Ronald Leopold, M.D. and vice president, MetLife Institutional Business.

Employers with Wellness Programs Taking an Investment Approach to Benefits
According to the MetLife study, employers that offer wellness programs are more likely to:

* See benefits as a very important tool for employee retention (70% of employers that offer wellness programs contrasted to 50% of employers that do not);
* Feel that the benefits programs they offer are better than competitors’ programs or the best in their industry (65% of employers that offer wellness programs vs. 42% that do not);
* Say they offer programs geared to an aging work force (47% of employers that offer wellness programs vs. 6% that do not);
* Believe that their benefits program is a very important reason why employees are attracted to their company (51% of employers that offer wellness programs contrasted to 22% of employers that do not).

Employees & Employers Feel the Healthcare Burden
The average employer that offers medical coverage indicates that 58% of their total benefits spend goes to medical coverage – this climbs to 65% for smaller employers with less than 500 workers. Employees too are concerned about health care costs – 61% of working Americans say they are very concerned about how the out-of-pocket costs associated with a major illness could impact their financial security. In addition, 62% of full-time employees are very concerned about being able to afford healthcare in retirement. This concern is even shared among younger employees – 56% of employees ages 21 to 30 expressed this same retirement worry.

“Health insurance is expensive, but employees surveyed for the MetLife study indicated that medical coverage is the second most important factor affecting their loyalty to their employer after salary/wages. Since medical coverage has essentially become ‘table stakes’ for competitive employers, a way to keep health insurance viable and offset future spending for chronic medical conditions can be to invest in targeted wellness and prevention programs,” adds Dr. Leopold.

Study Methodology
The Sixth Annual MetLife Study of Employee Benefits Trends was conducted during the third quarter of 2007 and consisted of two distinct studies fielded by GfK NOP. The employee survey polled 1,380 full-time employees, age 21 and over, at companies with at least two employees. The employer survey consisted of 1,652 interviews with benefits decision-makers at companies with a minimum of two employees, representing a mix of industries and geographic regions.