Companies Offering Cash Incentives to Healthy Workers

A slimmer waistline may mean a fatter wallet at some companies looking to contain their health-care costs.

Companies have long encouraged healthy lifestyles with the idea that more fit employees are more productive and more satisfied employees, but now they’re offering an incentive — cash.

"A few years ago, companies might have offered T-shirts or mugs," says Seth Serxner, a principal at Mercer Human Resource Consulting, according to CFO magazine. "Now they are offering cash." Incentives may come in the form of discounts on health-care contributions to workers who participate in weight-loss programs. Some companies might increase the deductible for those who don't. "They are using a carrot-and-stick approach," Serxner said.

The carrot approach is working for SparkPeople Inc., an online health and fitness coaching company in Cincinnati. Employees get an annual bonus of up to $1,000 if they meet weekly fitness goals. "The company philosophy is that you have to be in good shape to be productive," says spokesperson Mike Kramer. The results? "Our sick-day rate is almost nonexistent."

Obesity costs U.S. businesses big money. The National Business Group on Health puts the cost at $12.7 billion a year in medical costs, lost productivity, disability and sick leave.

Onsite fitness centers, more fruits and vegetables in the cafeteria and access to weight loss programs are some of the tools companies use to promote good health. The Sprint Corp. has even added slower elevators combined with attractive stairways to get their employees moving at the Overland Park, Kans. headquarters.

Serxner says that a comprehensive program to promote a healthy lifestyle will not only increase productivity, but it could also reduce health-care costs by up to 5 percent.

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