Benefits Strategy

Fitness Subsidies: Gym Reimbursement vs Fitness Rewards

Written by Amber

Fitness subsidies, gym reimbursements and fitness rewards are some of the most desired and effective components of a worthwhile corporate wellness employee benefit program, as they lead to more engaged employees. In fact, 86% of mid-large sized employers offer some sort of wellness financial rewards in order to remain competitive in the labor market. On that note, here is our guide to employee benefits for mid size businesses. When choosing to incorporate these incentives companies usually choose to either: reimburse the costs of gym memberships or to reward participants for completing fitness activity. Let’s compare and contrast the two:

Gym Reimbursement

Companies that take the gym reimbursement approach are looking to help employees with the financial burden of fitness. It’s simply about removing the burden of cost. Most companies that take this approach require employees to submit proof of gym membership purchase to HR. Sometimes fitness equipment may be covered as well. They then get reimbursed for all or part of their costs. You can start a reimbursement program just by using emails and spreadsheets, so it is simpler to implement. That being said, the paperwork can be quite burdensome and time-consuming. Some companies utilize an expense management system for this but that approach may be more expensive and causes problems with taxes.

If you are keen on implementing a gym reimbursement program, check out these top mistakes that most employers make in their gym reimbursement program.

Fitness Rewards

Companies that take the fitness rewards approach are looking to build healthy behavior rather than covering the costs of fitness. They utilize fitness trackers (like Fitbits) and other mechanisms to track the actual activity employees are doing (not just the financials). For example, rather than reimbursing purchase of a gym membership, they would track and reward attendance at the gym instead. Similarly, rather than purchasing Fitbits for everyone, they would reward employees for each day they take over 10,000 steps. This way employees are motivated to complete the activity rather than just make purchases. This also means that an employee who has a membership at Planet Fitness (starting at $10/month) get just as much reward as an employee with a membership at Equinox (around $200/month), provided that they exercise the same amount. The goal is to get them to exercise, where, when, and how much doesn’t matter.

Which approach is better?

There is no single answer to this question. It just depends on what the customer’s goals are. That being said, we at Incentfit generally suggest rewarding for fitness activity instead of reimbursing. Rewarding for fitness activity ends up being cheaper for businesses because employees will only receive payment for completed activity (this is a great small business employee benefit). You may also choose to implement these wellness rewards through wellness points, instead of dollars to further gamify the program. Alternatively, you may also want to offer paid time off as a wellness incentive, either way you will want to use a high-quality incentive management solution to implement these rewards otherwise it may become very tedious to manage due to the overwhelming administrative burden (check out this guide on benefits administration systems).

Rewards of this nature help establish good habits through what Charles Duhigg, author of The Power of Habit: Why We do What we Do in Life and Business calls a “habit loop.” Extrinsic rewards are powerful motivators in the beginning as it is easier for the brain to think that the activity is worthwhile. Over time, our brains associate completing a fitness activity with the original reward and the extrinsic reward becomes internalized (intrinsic motivation). Therefore, we generally believe this creates better health outcomes and is a better use of money for our customers.

You might also want to consider these mini-guides to help inform your wellness reward decision making process:

Whether you decide to use gym reimbursements or fitness rewards, Incentfit has your back. Both of these programs can be easily run through our mobile app and website. After initial setup, we take care of all of it from tracking activity and processing paperwork, to paying employees and handling taxes/accounting. Get started now!

Corporate Wellness Benefit Managers having a discussion while looking at an electronic tablet.

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