The Wellness Incentives Workbook

NEW EDITION The Wellness Incentives Workbook A step-by-step approach to... Smart incentive strategies Complying with healthcare reform Best practices Dodging pitfalls

Affordable Care Act? How to Use This Workbook 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. SEE PAGE 17 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. 2 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. Ready? Let's get started! WebMD Health Services logo WEB Version: square Blue hex #0A6FA7 2 Rewards Workbook

TODAY, NEARLY 90% who meet specific wellness criteria 3 UP FROM 57% IN 2009.

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. SIMPLER IS BETTER Program Planning & Preparation YES? Notes: FOR HIGHER ENGAGEMENT. Clients with simpler incentive 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. programs have coaching engagement rates 7% higher than those with complex programs. 4 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. WebMD Health Services logo WEB Version: square see aca limits on page 18 4 Rewards Workbook

WANT MORE ON CULTURE? 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. Get our Handbook of Wellness Culture Ideas! DOWNLOAD NOW! $ Leadership Policies Benefits Environment Communication Incentives 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 Programs reinforce wellness as a shared expectation. CULTURE IS ESSENTIAL FROM THE START! 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 WebMD Health Services logo WEB Version: square 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. 5 Rewards Workbook

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. Have you tried member or employee focus groups? 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. REQUIRED BY THE AFFORDABLE CARE ACT! Your design includes reasonable alternatives for those who aren t able to fulfill the requirements. WebMD Health Services logo WEB Version: square 6 Rewards Workbook

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. REQUIRED BY THE AFFORDABLE CARE ACT! You communicate about the reasonable alternatives you ve put in place for those who can t fulfill the standard requirements. WebMD Health Services logo WEB Version: square SEE PAGE 18 7 Rewards Workbook

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. 6 AWARENESS OF EMPLOYER-SPONSORED HEALTH INFORMATION SITES AWARENESS OF HEALTH PLAN-SPONSORED HEALTH INFORMATION SITES aware vs. unaware aware vs. unaware 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. WebMD Health Services logo WEB Version: square 8 Rewards Workbook

Strong Communication Gets Results 7 Companies that ramped up wellness-related emails saw an increase in both health assessment completions and coaching engagement rates. Health Assessment Completion Rate 60 55 50 15% INCREASE 55% Health Coaching Engagement Rate 45 40 40% 50% 35 17% INCREASE 30 33% Few Incentive-Related Communications A lot of Incentive-Related Communications WebMD Health Services logo WEB Version: square 9 Rewards Workbook

ACCORDING TO BEHAVIORAL ECONOMICS people may be more MOTIVATED to avoid losses such as penalties or surcharges than to make equivalent gains. 8

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. 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? WebMD Health Services logo WEB Version: square 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. 9 11 Rewards Workbook

Health Assessment Completion Rates by Type and Amount of Incentive 10 90 80 70 60 50 40 30 20 10 74% 76% 67% 66% 48% 51% 62% 34% 28% Insurance premium discount Cash (or cash equivalent) Health plan upgrade WHAT ABOUT HEALTH ACCOUNT CONTRIBUTIONS? Account-based incentive deposits are becoming more common and we expect that employers will continue to focus on this area. $25-$249 $250-$499 $500+ For rewards over $250, health plan upgrades achieve the highest health assessment completion rates. WebMD Health Services logo WEB Version: square 12 Rewards Workbook

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 2010 HA Completion Rate 2012 HA Completion Rate Change What s Different? 1 28.0% 53.9% 25.9% 2 3 4 5 6 7 8 50.6% 73.4% 22.8% 72.5% 87.4% 14.9% 29.3% 43.0% 13.7% 34.8% 46.4% 11.6% 43.2% 32.0% -11.2% 84.3% 57.6% -26.7% 55.6% 18.8% -36.8% 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 WebMD Health Services logo WEB Version: square Decreased incentive from $400+ to $0, and decreased communication level 13 Rewards Workbook

Community-Based Rewards 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 to work for a company that cares about how it impacts or contributes to society. 12 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 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 WebMD Health Services logo WEB Version: square 14 Rewards Workbook

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 85.2% % OF USERS BY AGE GROUP who agree/strongly agree 83.5% 83.3% 84% 84.6% % OF USERS BY AGE GROUP who agree/strongly agree 90.8% 90.8% 90.5% 90.9% 90.6% 89.2% 89.3% 88.4% 92.2% 92.1% 80.9% 82.3% 82.3% 81.3% 81.9% 29 or less 30-39 40-49 50-59 60+ 29 or less 30-39 40-49 50-59 60+ Clients With Community-Based Rewards Clients Without Community-Based Rewards In both cases, the greatest difference in job and life WebMD Health Services logo WEB Version: square satisfaction between clients that reward for community-based activities and those that don t is seen in the younger age groups. This difference diminishes as age increases. 15 Rewards Workbook

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. Health Contingent Participatory Activity-Only Outcomes-Based AWARENESS ACTION BEHAVIOR CHANGE PROGRAM OBJECTIVES 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. 14 WebMD Health Services logo WEB Version: square 16 Rewards Workbook

ACA definition of health contingent incentives: when people need to satisfy a standard related to a health factor or undertake more than a similarly situated individual based on a health factor IN ORDER TO EARN A REWARD. 15

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. New regulations apply to plan years BEGINNING JANUARY 1, 2014. 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) Tobacco cessation programs limited to 50% of total cost of coverage. Exercise, walking, or diet program participation Health coaching/ condition management participation Biometric outcomes (being within value range, meeting a certain number of metrics, or improving measured by percent change) Activity-only Outcomes-based At least once per year At least once per year 30% of total cost of coverage 30% of total cost of coverage If the program standard is medically inadvisable or unreasonable due to a medical condition Yes, for any individual who does not meet initial standard WebMD Health Services logo Tobacco-free status rewards limited to 50% of total cost of coverage. WEB Version: square Physician verification of medical condition allowed Must accommodate physician recommendation Physician verification of medical condition not allowed Must accommodate physician recommendation Must allow another reasonable alternative based on physician recommendation if requested Blue hex #0A6FA7 18 Rewards Workbook

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. 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. 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. WebMD Health Services logo WEB Version: square 19 Rewards Workbook

See which side you fall on to know if you re ready to make the jump. 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 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 TWO YEARS OR MORE YES YES YES NOTHING ACHIEVABLE YES YES GOT IT COVERED YES WE RE GOOD WE RE SET CHECK DON T LEAP TOO SOON! (MASTER PARTICIPATORY INCENTIVES FIRST) IT SOUNDS LIKE WebMD Health Services logo WEB Version: square YOU RE READY! 20 Rewards Workbook

The Impact of Incentives on Participation, Activity & Outcomes 18 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. Coaching & Incentives Moving from no incentive for health coaching to having a coaching incentive raised coaching engagement by 21%. 9.6% 38.3% 21% No Biometric Screening Incentive Biometric Screening Incentive Offered WebMD Health Services logo WEB Version: square 21 Rewards Workbook

8. Bonus: Have You Dodged These Common Pitfalls? PITFALLS CONSEQUENCES YOU VE DODGED A BULLET IF... Overcomplicated program 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. The incentive IS the goal People do enough to earn the reward, but don t make lasting changes to their health.! Short-term rewards reinforce long-term behavior change. Unattainable goals If the goals that people need to meet seem unattainable, they may not even try.! Rewards are set up to let people start small and build on their successes over time. Focus on prizes Prizes and giveaways may not drive sustained health changes.! Rewards reinforce your overall wellness program goals and your organization s health culture. Penalties that hurt morale You lose your population s trust.! People WebMD Health want Services logoto participate WEB Version: square because your wellness program makes them feel good about themselves and their health. 22 Rewards Workbook

9. Can Your Wellness Incentives Vendor Support All Your Needs? 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 WebMD Health Services logo WEB Version: square Vendor has experience implementing effective outcomes-based programs Blue hex #0A6FA7 23 Rewards Workbook

The Wellness Incentives Workbook has been brought to you by WebMD Health Services Still have questions? Contact us at whsinfo@webmd.net or visit WebMD Health Services logo WEB Version: square 24 Rewards Workbook

EVALUATION: Endnotes 1 Wieczner, Jen. Your Company Wants to Make You Healthy, WSJ, April 8, 2013. http://online.wsj.com/article/sb10001424127887323393304578360252284151378.html 2 WebMD s 2013 Incentives Best Practices Study of 52 Employer Clients Tracked Rewards-Related Behaviors of Over 2 Million People. 3 Wieczner, Jen. Your Company Wants to Make You Healthy. 4 WebMD s 2013 Incentives Best Practices Study 5 WebMD s 2013 Incentives Best Practices Study 6 2014 Blue Research End User Insights Panel 7 WebMD s 2013 Incentives Best Practices Study 8 Ariely, Dan. Predictably Irrational: The Hidden Forces That Shape Our Decisions. New York, NY: HarperCollins, 2008. 9 WebMD s 2013 Incentives Best Practices Study 10 WebMD s 2013 Incentives Best Practices Study 11 WebMD s 2013 Incentives Best Practices Study 12 Cone Communications, Research and Insights, 2006 Millennial Cause Study, http://www.conecomm.com/2006-millennial-cause-study 13 UnitedHealth Group, Volunteering Linked to Better Physical, Mental Health, http://www.unitedhealthgroup.com/newsroom/articles/feed/unitedhealth%20group/2013/0619healthvolunteering.aspx 14 WebMD s 2013 Incentives Best Practices Study 15 United States Department of Labor, The Affordable Care Act and Wellness Programs Fact Sheet, http://www.dol.gov/ebsa/newsroom/fswellnessprogram.html 16 Nyce, Steven, Boosting Incentive Participation Without Breaking the Bank, Towers Watson Insider, July 2010; and WebMD Health Services 2013 Book of Business. WebMD Health Services logo WEB Version: square 17 Guidance for a Reasonably Designed Employer-Sponsored Wellness Program JOEM Volume 54, Number 7, July 2012. 18 WebMD s 2013 Incentives Best Practices Study 25 Rewards Workbook