Many universities and corporations offer a health wellness program that helps their employees improve or maintain their health and get paid (a relatively small amount) for doing so. The programs vary but typically consist of employees completing a health assessment, receiving a program for healthy living, and monitoring their monthly health activities. Why would universities and corporations pay employees to take care of themselves? How does health insurance affect the incentive of employees to improve or maintain their health? Would a wellness program increase or decrease the health insurance premiums that an insurance company would charge the university or corporation to provide insurance coverage? Briefly explain.

Universities and corporations are willing to pay employees to take care of themselves because healthy employees perform more efficiently, increasing the organization's efficiency and improving productivity.

Healthy employees also lower the organization's total costs by reducing absenteeism and premature retirements. Wellness programs generally reduce the insurance premiums paid by the employers, therefore some costs are offset by lower premiums.

On the other hand, once employees obtain health care insurance, their motivation to maintain a healthy lifestyle is negatively affected.