Business of Well-being

Best Practices: Incentive Design Strategies

Designing and launching incentives for a wellness program can be confusing and overwhelming. This information is provided to give employers an overview of the most common incentive strategies, the range of participation based on amount of incentive, and what's working versus what is not working.

Creating a Supportive Culture

This is an important step many employers miss, leading to significantly lower participation in their programs. The ultimate goal of these programs is to engage as many employees as possible and to help them create a sustainable healthy lifestyle. Success begins with executive-level involvement in the program, all the way down to setting a healthy standard for the food made available at company meetings and events.

This has an impact on how much incentive is required to achieve certain levels of participation. Research shows that communication and organizational commitment levels are significant contributors to participation levels. If there is a low level of communication and organizational commitment, the organization will need a much higher incentive value to achieve 50 percent health assessment completion rates.

High levels of communication and organizational commitment drive significantly lower incentive values needed to achieve 50 percent health assessment completion rates.

Keep the Design and Message Simple

Participation will decrease if the program is too complex and difficult to understand. Many programs also create the opportunity for employees to simply "check boxes" versus creating real, sustainable changes in their lifestyle.

This approach maintains short-term, external motivation instead of contributing to a more intrinsic motivation. Be sure to incentivize the behaviors you want employees to embrace such as validated physical activity or engagement with a health coach.

Alignment with Organizational Goals and Objectives

This helps to determine the level of incentive given for each activity, and for incentivizing a participation-based program or an outcomes-based program. The growing trend of rewarding based on health outcomes may not be the right fit now but may be an option in the future. Knowing what is important to senior leadership will help to create the right incentive strategy and long-term program design.

Make Sure the Program is Legal

There are multiple moving parts in keeping a program compliant and they can change frequently, especially when the program requires certain activities be completed, or when outcomes-based rewards are involved.

Staying up-to-date with new legislation will help to make sure the program is within the guidelines for the Affordable Care Act (ACA) along with the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act's (GINA) requirements.

What is Working?

We continue to see the incentive program tied to the benefit plan design increasing and driving high engagement. In our research of over 170 plan years of data we are seeing approximately one-half of our clients utilize the benefits-integrated incentive approach as part of their package.

Nearly one-third offered cash/gift cards, while just under 10 percent incentivize with health account deposits, however, they are beginning to grow in popularity. Our research found the type of incentive administration is not a significant driver of participation rates, which concurs with findings from other published studies.

Best Practice Utilization

The Health Enhancement Research Organization (HERO) has worked since 1996 to develop and refine a "best practices" scorecard[1] as a way for companies to assess "the critical core components that are generally accepted as the key building blocks common to today's most successful, respected, and data-rich employee health management programs." The following are key elements assessed by the scorecard, which, along with incentives, drive member participation and engagement: Corporate Culture/Leadership Commitment

  • Senior Leadership Commitment and Support

  • Management and Supervisor Education and Support

  • Employee Buy-in and Engagement

  • Employee Leadership Network (i.e., Wellness Champions)

  • Supportive Environment/Company Policies Advocate Optimal Health


  • Comprehensive Communications Plan

  • Pre-launch and Ongoing Education and Program Promotion

  • Regular Stakeholder Status Reports

Wellness incentives and their delivery can make or break the success of any program. Following these strategies can maximize the ROI and participation levels, while ignoring them can lead to higher costs and confusion.

By achieving C-suite level buy-in, simplifying the incentive package, aligning the program with organization goals and objectives, and delivering a strong communication plan, your organization can ensure the successful implementation and utilization of your incentive program.

About the Author

Hayley Hines MS, CHES is the  RVP Health and Wellness Solutions  at Onlife Health. She has 18 years of experience in the corporate wellness industry serving in a variety of roles and organizations including Lockton Benefits Group as director of health risk management and most recently as senior vice president of strategy and product development at Viverae.


[1] HERO Employee Health Management Best Practice Scorecard - Version Two. HERO Think Tank.

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