If you owned a company and paid the health insurance of your employees, would you desire to have healthy employees, given that insurance premiums are higher for an unhealthy workforce? Your likely answer is YES because in business, it is difficult to make a profit, and health insurance premiums paid for employees are at major expense.

Corporate wellness programs have proliferated in recent years due in part to the Affordable Care Act, which increased both the maximum incentives, and the maximum penalties that employers may use to encourage employee well-being. Most companies therefore now have both “well-being carrots,” such as giving employee discounts on insurance premiums or even extra cash, and “well-being sticks,” such as imposing surcharges on premiums for those who do not make progress towards getting healthy. For example, the state of Maryland installed penalties up to $450 per person for 2017 on any employee who fails to undergo certain screenings or treatment plans. Similarly at CVS Health, employees pay an extra $600 if they do not comply with certain health policies. Some employers, however, face lawsuits for violating the Americans with Disabilities Act which forbids employers from requiring medical exams and making disability-related inquiries.

JetBlue has a corporate wellness program called LifeVest where the firm gives $500 to employees who improve their body-mass index. However, a recent report from the Bipartisan Policy Center’s CEO Council on Health and Innovation concluded that “results from studies examining the return on investment of wellness programs are mixed.” Despite mixed results, 74 percent of firms with wellness programs are increasing incentives “paid and charged” to employees to be and stay healthy, up from 57 percent a few years ago.

Source: Based on Lauren Weber, “A Health Check for Wellness Programs,” Wall Street Journal, October 8, 2014, B1 & B8.