When it comes to incentive programs, what could beat out cash rewards?

Bloomberg Law | Martin Berman-Gorvine | For Wellness Programs, Winning Hearts May Beat Stuffing Wallets

When it comes to enticing employees to participate in wellness plans, cash is essential but intangible rewards can really make the program catch fire.

That’s the message from vendors who help administer such programs for employers. The catch is the vendors can’t supply the missing excitement; employers must do that themselves, according to Iris Tarou, director of wellness program services at West’s Health Advocate Solutions, a clinical health advocacy company based in Plymouth Meeting, Pa.

One way for employers to draw interest to the program is to designate an employee to increase ‘‘enthusiasm’’ among other workers, she told Bloomberg Law. The aim is to demonstrate that wellness isn’t just something the company is doing to save money; it’s a part of the corporate culture, she added.

Offering intangible incentives may also be more attractive for employers in an uncertain regulatory environment. The Equal Employment Opportunity Commission is reviewing portions of its employer wellness rules covering employee-participation incentives. The EEOC’s current wellness rules allow employers to offer workers up to 30 percent of the cost of self-only health insurance for participation in wellness programs.

Low-Cost Motivators

Even if the EEOC’s restrictions on what kinds of incentives employers can offer remain as they are, employers may want to focus on the intangible incentives because cash isn’t necessarily the most important motivator.

Research has shown that monetary rewards can actually backfire, Joe Burton, founder and chief executive officer of Whil Concepts Inc., a San Francisco-based health and wellness company, told Bloomberg Law. Better, he said, are ‘‘the intrinsic motivators of setting a goal and accomplishing it.’’ For example, if participating in a wellness program helps an employee sleep better and feel less stressed, ‘‘that’s always more sustainable than monetary rewards,’’ he said.

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‘‘Intrinsic motivators’’ encourage participation in wellness programs, because they ‘‘get employees not only to think about their health, but as contributing to something bigger than themselves,’’ Elizabeth Merritt, Vice President of Client Management at East Greenwich, R.I.-based workplace wellness program company Provant, said. An example she offered is for the employer to make contributions to a charity designated by the employee.

For the company, creative rewards such as preferential parking ‘‘may not cost anything,’’ Alan Kohll, founder of wellness program provider TotalWellness, told Bloomberg Law.

‘‘In addition to individual rewards,’’ he suggested, ‘‘have group rewards where teams can compete against each other. These are fun activities that build camaraderie.’’ But the corporate culture has to support them, he added.

Money Makes the Wellness Program Go Round

Generally, health insurance premium discounts remain the standard wellness motivator companies offer their employees, the vendors agreed, although they don’t build excitement like the more creative rewards do. Money deposited into health savings accounts is an option at organizations that offer this benefit, Merritt said.

Tangible rewards can also be creative. Burton suggested offering ‘‘marketplaces where you can convert your points into healthy products, such as sneakers, FitBits, or yoga mats.’’

Kohll, however, said it’s important not to slavishly ‘‘copy’’ what some other company is doing to motivate its employees.

‘‘General best practice is to meet the population where they are,’’ Merritt said.