Document Type

Seminar Paper

Date of Original Version



Employer-based health promotion programs have been around for about four decades, but in recent years increasing attention is being given to the use of financial incentives and penalties as ways to encourage employees to become more accountable for their own health. The use of wellness incentives has been gaining traction, and employer-sponsored programs that incorporate these types of strategies have been growing rapidly. With the passage of the Affordable Care Act, the upcoming change to federal rules on wellness incentives is likely to drive up participation rates. However, this is not without controversy and it has raised some very important legal and ethical questions regarding the role an employer should play in managing the health of its employees, and the use of economic incentives as a mechanism to influence participation and behavior modification. A theoretical framework is used to help understand employee behavior and analyze the effectiveness of the “carrots and sticks” approach. By analyzing studies on behavioral economic-based interventions for wellness programs, I will try to answer and substantiate the hypotheses put forth in this paper.