Should employees be given cash to lose weight?
Investment pays off — at least for the short term
Many employers give premium reductions to workers who complete health risk assessments or attend weight loss programs, and some firms are considering charging obese workers more for health benefits. But what about giving workers cash as a reward for losing pounds?
A study of 200 overweight employees at three North Carolina colleges suggests that even a small amount of money can result in significant weight loss.1
During a three-month period, one group received no incentives, and the other two groups received $7 or $14 for each percentage point of weight they lost. For instance, a 200-pound employee in the $7 group who lost 10 pounds would get $35. Workers got no help for how to lose weight. The unpaid employees lost an average of two pounds each, but those in the $7 group lost an average of three pounds each, and those in the $14 group lost an average of 4.7 pounds each.
"What we learned is encouraging," says Laura Linnan, ScD, one of the study's authors and an associate professor at the University of North Carolina at Chapel Hill's School of Public Health. "You probably can't solve the whole obesity problem with this approach. We need to understand more about it before we start restructuring benefits. But cash incentives do seem to provide some motivation."
This approach is appealing to many employers because few resources are required to implement it, says Eric A. Finkelstein, PhD, director of the public health economics program at RTI International, a research institute based in Research Triangle Park, NC. As opposed to building a fitness center or implementing a wellness program, the program doesn't have any costs unless employees lose weight, he explains. "If they do, then you only pay them what you agreed to upfront," he says. "There is evidence that these programs are on the rise."
The dollar amount to offer employees remains an open question. "Until there is better evidence on return on investment, it's hard to say what the right level is," says Finkelstein. A "good target" is $500 for the total incentive employees can earn in a year for losing weight, he suggests. Even though many employers give incentives for completing a health risk assessment or attending coaching sessions for weight management, participation often remains low, says LuAnn Heinen, director of the National Business Group on Health, which studies the costs and effects of obesity. "Health and healthy weight should, over time, be its own reward," says Heinen. "However, incentives do get employee attention and can move people from 'I'm going to work on this at some point' to 'I'm starting now.'"
If considering implementing financial rewards for weight loss, consider the following items:
• Use incentives to maintain weight loss.
At O'Fallon, MO-based VSM Abrasives, employees received either $125 or a day off for every 10 pounds they lost from July through December 2007 as part of the company's Get Healthy for Life program, reports Denise Drew-Douglass, HR manager. A total of $1,250 was paid out to six employees; three lost 10 pounds, two lost 20 pounds, and one lost 30 pounds. To ensure that results aren't just short term, employees must keep it off for one year, or they have to pay the money back, says Drew-Douglass. Employees go into "maintenance mode" by participating in a monthly weigh-in, with the president of the company handing out $25 or a certificate for a day off, whichever the employee chooses, to individuals who meet target BMI ranges or lose 10% of their initial weight and stay at that number.
About 80% of the company's 125 employees participate in the maintenance program. "If you are in a healthy BMI, you receive $25 every three months and a day off on the 12th consecutive month," says Drew-Douglass. "So you can receive $100 per year plus a day off with pay. About 50% of our employees receive these incentives regularly."
Several people have made positive changes regarding their weight and kept it off for a long time, she says "The benefits are hard to put in dollar amounts. We have great morale, low turnover, and very happy employees," Drew-Douglass says. She estimates that the company has paid out $23,000 for the maintenance program over the past four years.
• Don't leave out employees who don't need to lose weight.
Employees should be rewarded for taking action to improve or maintain good health, regardless of their weight, says Finkelstein. "Weight is an easily measurable metric, but of course genetics plays a role in weight," he adds. "One might consider other clearly measurable targets, such as completing a running or bike race, as an indicator that the individual is clearly making efforts to improve their health."
• Offer other rewards.
In Arkansas, state employees get up to three days off per year by earning points for quitting smoking, eating more fruits and vegetables, and increasing physical activities.
"How quickly an employee can earn a day off is different for each person, depending on how aggressively or slowly they do the activities," says spokeswoman Helen Weir. A total of 4,750 points must be earned for a day off, and employees earn one point for each serving of fruit or vegetables eaten, one point for every 10 minutes of cardiovascular exercise, 100 points for completing a health risk assessment, and five points for each day tobacco is not used. More than 2,500 workers have registered, and 947 have earned time off work.
At Freedom One Financial Group in Clarkson, MI, an annual contest awards a grand prize each year to employees who lose the most body fat. "Last year we broke into teams of four. The team who lost the most body fat won a free cruise," says John Young, vice president of retirement plan sales. Fifty of the company's 65 employees participated, with an average weight loss of 6.5 pounds and body fat loss of 1.41%, Young said. The cruise for four employees cost about $5,000, he says.
Paying employees outright for weight loss might be somewhat "short sighted," says Young. "The goal is to create healthier employees through healthier lifestyles, not just skinnier employees. We don't want to encourage people to lose weight for the wrong reason," he says. "Fat content as the measurement for the payment might be a better way to incent the employee."
More than 85% of Blue Cross and Blue Shield of North Carolina employees complete a health screening and risk assessment to receive up to a $600 deduction on health insurance premiums. "We also do an annual physical activity and nutrition challenge, called Blue Challenge," says Sarah Weiser, PhD, the company's director of employer health partnerships.
Based on their personal health goals, employees participate in categories of losing weight, reducing body fat, or maintaining their weight, she says. "There were 173 participants, and they lost a combined 634 pounds," says Weiser. Prizes for winners in each of the categories included a $100 gift card, a $50 gift card, and a $25 gift card.
• Evaluate long-term outcomes.
"This type of incentive only addresses initial weight loss which, according to most experts, is the 'easy' part," says Heinen. "The real challenge is weight maintenance." Even if some or all of the weight is regained, however, annual campaigns can help prevent the two to four pound per year weight gain that is typical for adults, she says.
• Don't eliminate other programs.
Paying employees to lose weight should not substitute a comprehensive wellness program, including healthy lifestyle education, healthy dining initiatives, support for physical activity at work, on-line or onsite weight management programs, coverage of nutritional counseling, or other coaching services, says Heinen.
The bottom line? "If a company has extra dollars to invest, and paying employees to lose weight is a fit in terms of company culture, then it can be a fun and attention-getting option," Heinen says.
Reference
- Finkelstein EA, Linnan LA, Tate DF. A pilot study testing the effect of different levels of financial incentives on weight loss among overweight employees. J Occ Environ Med 2007; 49:981-989.
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