Workplace Wellness Programs

New draft rules elaborate on Affordable Care Act provisions expanding employers’ ability to spur workers to improve their health.

The poor health habits of many workers, growing rates of chronic disease, and the rising cost of health benefits have created new interest in workplace wellness programs. Employers value these programs as a way to reduce absenteeism and employee turnover, and to offer a benefit that is appealing to many current and prospective employees. Some evidence also suggests that comprehensive wellness programs may pay off for employers by reducing their expenditures for employees’ health care.

At the same time, there is debate over how best to structure wellness programs. Should programs offer “carrots”—financial rewards for participating in wellness programs? Should they come with “sticks,” or penalties for not participating in them? Should either carrots or sticks be tied to an individual’s success in meeting health goals, such as managing blood pressure or losing weight?

The Affordable Care Act of 2010 will, as of 2014, expand employers’ ability to reward employees who meet health status goals by participating in wellness programs—and, in effect, to require employees who don’t meet these goals to pay more for their employer-sponsored health coverage. Some consumer advocates argue that this ability to differentiate in health coverage costs among employees is unfair and will amount to employers’ policing workers’ health.

This Health Policy Brief explains trends in wellness programs and highlights issues to watch. It was originally published online on December 4, 2012 in Health Affairs and updated on May 16, 2013.