Using carrot or stick for healthy behaviour

Could use of penalties – such as higher premiums – in U.S. migrate to Canada?
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 06/04/2012

The use of financial incentives to encourage a healthier staff population is on the rise. One-quarter (26 per cent) of 335 Canadian employers surveyed by Towers Watson in 2011 said they planned to offer this type of reward in 2012 — up from the 13 per cent that already did so.

But, on the flip side, disincentives around undesirable employee behaviour are also on the rise — at least in the United States. The use of penalties more than doubled from 2009 to 2011, increasing from eight per cent to 19 per cent, and is expected to double again by 2012 when 38 per cent of the survey respondents plan to have penalties in place.

Walmart, the retail giant based in Bentonville, Ark., says it will charge tobacco users higher premiums but also offer free smoking cessation programs, according to media reports. And grocery chain Safeway has employees tested on tobacco usage, weight, blood pressure and cholesterol, says David Willows, vice-president of strategic market solutions at Green Shield Canada in Toronto. Workers specifically receive premium discounts for each level and if they pass all four, they could have premiums reduced up to $800 per individual or $1,500 per family. If they fail, they can be retested in 12 months.