On June 1st 2016, we hosted Michael Dermer, founder of IncentOne and of The Dermer Group, to discuss the latest program design & execution strategies that employers and consultants are using to optimize their reward/incentive efforts. In the second part of the webinar, Michael discussed the latest EEOC regulations for wellness programs.
In 1998, Michael founded IncentOne, one of the first wellness companies to offer rewards and incentives. IncentOne offered services to health plans, employers, and third-party vendors, and was later acquired by Welltok. Since then, Michael has seen the industry grow and evolve and in 2016, went on to start the Dermer Group, a wellness/healthcare consulting group specializing in rewards/incentives and go-to-market approaches.
Michael followed by giving us a brief overview of the current trends in the incentive industry beginning with the strong growth in the following trends:
- 93% of employers will expand funding for incentives in the next 3 to 5 years
- 84% of incentive programs are reported successful
- 81% of large employers are using incentives
- Incentives have grown from $260 avg. per employee in 2010 to $693 avg. per employee in 2015
- One current client even offers $3,600 of incentives per employee
Michael then laid out the framework of the incentive program design that the Dermer Group offers; accounting for audience considerations, actions, incentive value, reward type, measurement, legal and regulatory, tax implications, and communication tools. He discussed which features actually are able to optimize incentive programs, including a simple, easy-to-use portal, the clear communication of incentive values, a mix of participation & outcomes, a mix of carrots and sticks, the integration with engagement tools, and personalization. Michael then explained the “Theory of Relativity” on incentive value: that the incentive must be “relative” to variables such as level of effort and income level to optimize engagement.
In the second part of this webinar, Michael went over the complicated current landscape of legal and compliance regulations, including the most recent EEOC regulations for wellness programs. He began with HIPPA and the 2006 Wellness Regulations which allowed for 20% of the cost coverage for rewards/incentives and divided programs into participatory and health-contingent categories. Michael explained the Genetic Information Nondiscrimination Act of 2008 (GINA), which prohibited incentive programs from offering rewards in exchange for genetic information such as family medical history. Then, the Affordable Care Act and the 2013 HIPPA Wellness Regulations increased reward maximum from 20% to 30% and 50% (if smoking cessation) of cost of coverage. Michael then clarified what incentives are taxable or not taxable, which is something employers must keep in mind when choosing an incentive type. Finally, Michael covered the most recent EEOC wellness regulations, providing insight into what they mean and his legal interpretation of some of the undefined areas of the law.
Before taking questions, Michael provided us with an overview of his company, the Dermer Groups incentive services including program assessment and design, on-call customer support, vendor evaluation, sales process enhancement, and online training courses.
Questions answered in the Q&A portion:
1. What are some unique challenges that may apply to mid-market brokers & employers?
2. What’s the best way to access this knowledge? Would you touch upon the kinds of services the Dermer group is providing to the vendor community, the employer or the consultant community so they understand what may be available based on their unique interests.
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