In addition to popular incentives for participating in wellness program activities, employers and insurance carriers have turned to outcomes-based incentives hoping to lower plan costs and improve population health. While laws such as HIPAA, ERISA and, most recently, PPACA provide guidance for incentivizing employees to improve body metrics and sustain healthy behaviors, plan sponsors should tread cautiously around more aggressive incentives and premium surcharge strategies.

Employers' focus on rewarding healthy results "has been fueled by regulation," says Eric Herbek, vice president for consumer health product at Cigna. Specifically, the health care reform law increased the percentage employers can award as an incentive or disincentive from 20% of the individual health premium to 30% and up to a 50% differential if they include a smoking metric.

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