“Healthy Incentives” Wellness Program Saves County $46 Million Over Five Years

A Seattle area program entitled “Healthy Incentives” that has saved King County $46 million on employee health care since 2006, won the 2013 Innovations in American Government Award, which is bestowed by The Ash Center for Democratic Governance and Innovation at the John F. Kennedy School of Government at Harvard University. The award was established in 1985 by the Ford Foundation to honor government agencies at any level that work to improve the quality of life of citizens.

Healthy Incentives

The Healthy Incentives program has saved King County taxpayers millions of dollars in county employee health care costs. The benefit plan rewards employees with lower out-of-pocket expenses for choosing high quality healthcare plans while participating in wellness activities. The program was created after the realization that employee healthcare costs were rising at a rate three times higher than the Consumer Price Index. The program is credited with:

  • More than 800 individuals quitting smoking
  • Over 2000 individuals classified as overweight or obese have lost at least 5 percent of their weight
  • Fewer health claims for pneumonia, bronchitis and other illness associated with smoking
  • $46 million savings from 2007-2011, with $14.6 million attributed to health improvements of employees

The program has seen a participation rate of 90 percent or higher since its inception. When compared with national averages, participants in Health Incentives lost more weight and smoked less.

Wellness Programs

Although Health Incentives was created before the passage of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), the ACA had multiple provisions to better understand and help employers utilize wellness programs in an effort to reduce cost and increase overall health. Among other things, the ACA provided for a Centers for Disease Control study and evaluation of employer-based wellness programs (sec. 4303), provided for financial grants to small employers with comprehensive workplace wellness programs (sec. 10408), and directed the Secretary to evaluate community-based prevention and wellness programs to develop a plan for Medicare beneficiaries (sec. 4202). In 2013 HHS released a final rule to assist group health plans and health insurance issuers with offering nondiscriminatory incentive programs (Final Rule, 78 FR 33158, June 3, 2013). Discrimination based on health status is prohibited by the ACA. Speaking with Wolters Kluwer, Brooke Bascom, the Healthy Incentives Health Reform Program Manager, noted that the program was designed to reward participation in the program and was not results-based. “It might take seven times to quit smoking and we want to reward someone every time they try,” said Bascom.

The King County Healthy Incentives program has an online Toolkit designed to assist other entities with replicating the program. The Toolkit provides an overview of the program, information on its design, information on partnership with the labor force including a Memorandum of Agreement between management and labor, employee outreach strategies, and measurement and evaluation of the program. Speaking with Wolters Kluwer, Daniel Harsha, Associate Director for Communications at the Ash Center for Democratic Governance and Innovation stated that one of the reasons Healthy Incentives was selected for recognition was the fact that it “served as an important model for other municipal and state governments across the country who are struggling with how to contain rising employee healthcare costs.” Overall the Harvard Ash Center analysis felt the program was well suited for replication.