Many policy makers believe that health status would be improved and health care spending reduced if people managed their health better. This study examined the effectiveness of a program put in place by BJC HealthCare, a hospital system based in St. Louis, Missouri, that tied employees' eligibility to participate in the system's most generous health plan with participation in a wellness program. The intervention, which began in 2005, was associated with a 41 percent decrease, relative to a comparison group, in hospitalizations for conditions targeted by the wellness program but with no significant decrease in other hospitalizations. We found reductions in inpatient costs but similar increases in non-inpatient costs. Therefore, we conclude that although the program did cut some hospitalizations, it did not save money for the employer in the short term. This finding underscores that wellness program incentives under the Affordable Care Act are unlikely to greatly reduce health care spending over the short run. C ardiovascular disease, diabetes mellitus, hypertension, and chronic lung diseases are among the leading causes of disability and mortality in the United States.1 It is widely believed by policy makers that effective promotion of wellness will contribute to health improvement and mitigate health care cost increases. Many employers offer voluntary health screenings, fitness and smoking cessation programs, and other preventive services. However, most voluntary programs have yielded low participation and have failed to attract high-risk employees.3,4 These results have prompted employers to introduce stronger incentives-for example, paying people for completing a health risk assessment or enrolling in smoking cessation programs, or requiring these activities as a condition for reduced insurance premiums or even access to certain plans.The Affordable Care Act emphasizes prevention in many ways, including by expanding allowable wellness incentives for employerbased health insurance. Yet little is known about the effects of these incentives on health services use, outcomes, and costs. This study examined the effectiveness of a comprehensive wellness program introduced in 2005 for the employees of a major hospital system and their dependents. The program tied eligibility to participate in the hospital system's most generous health plan with participation in the wellness program. We used as a comparison group employees covered by two other employers in the same metropolitan area that did not offer insurance-based wellness incentives and whose benefits were stable throughout the study period.We used data from before and during the intervention and a difference-in-differences analytical strategy that controlled for baseline health characteristics, age, sex, and demographics. To