Many employers have wellbeing programs that include financial incentives to encourage participation. However, there is little evidence that traditional wellbeing incentive programs lead to sustained behavior change, increased health or decreased medical costs. The programs are often expensive, can be administratively cumbersome to manage, and engagement is often underwhelming.
The WTW 2024 Global Benefit Attitudes Survey found that employees give employer wellbeing programs a Net Promoter Score of -20, demonstrating that they are not highly valued by employees. Given the pressure of cost management and difficulty in demonstrating return or value on investment, some employers are considering revising or unwinding their existing programs.
The 2025 WTW Best Practices in Healthcare Survey showed that 48% of employers offer wellbeing financial incentives, down 10 points from 2023, and the lowest percentage seen in the past 13 years. Twenty-two percent of those employers that currently offer a wellbeing financial incentive program report that they plan to modify or eliminate their program in the next three years. However, employers may be reluctant to discontinue or downsize wellbeing incentive programs, fearing employee discontent from the loss of such programs.
See also: Does money matter in wellness programs?
How employers can use behavioral science to increase wellbeing incentive program engagement
Employers can use precepts of behavioral science, which incorporate both psychology and economics, to increase engagement and effectiveness of wellbeing programs and manage employee perceptions of decreasing or discontinuing financial incentives.
1. Use framing to positively communicate the transition away from financial incentive programs
Frame the transition positively by emphasizing that the upcoming change in incentives allows companies to invest in enhanced benefits or avoid increases in premiums and/or out-of-pocket costs. Employers can position changes as an attempt to modernize and optimize value for employees. Any change can feel jarring, so communicating the reasons why changes are being made is important for transparency and understanding.
2. Manage perceptions of loss during changes to wellbeing program
People hate losses much more than they like gains. Employers can alleviate this loss aversion by pairing a perceived gain (like a new benefit or program) with the sunsetting of wellbeing financial incentives. Communications can emphasize new or existing programs and benefits that employees can still access.
3. Give employees substantial notice before changes in incentive programs
People are more focused on the present and tend to discount the future. When planning to remove or alter financial incentive programs, employers can communicate incentive program changes with a long lead time so that any perceived “takeaways” feel far off and less disruptive. Employees are less likely to be disappointed when the incentive is later discontinued because this was their expectation.
4. Communicate revision or removal of financial incentives with transparent reasoning to enhance a sense of fairness and support wellbeing culture
Individuals are highly attuned to the principle of fairness, and are less likely to embrace programs or incentives they perceive as unfair. Some employers might cut back on incentives to enhance fairness, as lower-wage workers and those with set schedules or less access to technology might be less likely to receive incentives. Employers can address these aspects of fairness in messaging to employees when modifying or removing incentives.
5. Be sure that goals for incentives that remain in place are achievable
People are overly optimistic about their abilities and often overestimate their ability to complete required steps to earn financial incentives. Of those who start engaging in a program, many will not see the program through to completion. This experience can be demotivating for employees and can lead to less engagement in desired activities overall. Incentives are most likely to be effective in short-term programs that require little planning or completing of distant milestones. Examples could include completing a biometric screening or obtaining this year’s flu shot.
6. Offer choices in wellbeing programs to align with member goals and values
Each employee has their own definition of wellbeing and is most likely to benefit from programs and activities that are aligned with their needs and goals, rather than activities that are pre-selected to earn dollars. Employers can offer programs or better promote existing programs that connect to employees’ personal goals and a deeper sense of purpose. Offering choice in programs can allow participants to pursue what they find most meaningful and ultimately enhances their chance at success.
7. Promote engagement through social networks
Humans are social creatures and yearn for connection and community. Employers should integrate social elements to drive wellbeing participation. Employers can shift away from wellbeing incentive programs focused on individual activity with offerings that include group interaction. This can include volunteer programs and voluntary group sports activities. Further, employers can also harness employee resource groups (ERGs) and internal company social networks such as Viva Engage and Slack to promote awareness and engagement.
Done right, this can improve your health plan value
Unwinding or changing financial incentives can pose a significant challenge for employers, but it can improve health plan value if done thoughtfully. Behavioral science offers evidence-based strategies to support employers making the transition away from financial incentives while retaining engagement in wellbeing programs and encouraging healthy behaviors.
Meg Bracht, senior associate in WTW’s Health & Benefits practice, and Jeff Levin-Scherz, managing director and population health leader of the North American Health and Benefits practice at WTW, contributed to this article.
