Wellness Programs : Can You Dock Smokers and Overeaters?
Studies show that roughly five percent of workers drive about 80 percent of your health benefit costs.
No shocker here – Smokers and obese personnel are the highest risk group for developing the sorts of chronic medical problems that send costs through the roof.
A small, but rapidly growing number of employers are taking desperate measures to avoid the costs associated with these personnel. The step can be broken down into three levels of aggressiveness and potential risk/reward.
Level one – the company installs a health promotion program in which non-use of tobacco workers and those who commit to maintaining a healthy weight receive financial incentives that lower their share of monthly insurance premiums.
Level two – the employer disqualifies job candidates who smoke or are significantly overweight from hiring consideration. Alternatively, some firms require new hires to undergo a health risk appraisal as a condition of being hired.
Level three – the corporation docks pay or fires workforce who fail to control their lifestyle-related health risks. Example – A company called Clarian Health has sent notifications to workforce that beginning in 2009, workforce who smoke or chew tobacco will be charged $5 per paycheck.
Are these strategies legal? at level one, the answer is a qualified yes. health insurance portability and accountability act (HIPAA)s non-discrimination rules permit such incentives under several conditions.
Health Promotion incentives walk a fine line in terms of HIPAAs non-discrimination rules. It is legal to reward workers for wellness participation but its illegal to punish those who fail to improve their health.
Example – If an worker follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. Similarly, if an worker fails repeated tries to quit use of tobacco, you’re still legally obligated to give them another shot next year.
Furthermore keep in mindthat, by law, the size of the reward or penalty under your health promotion program cant exceed 20 percent of the total cost of coverage.
The other two are still largely uncharted waters in the courts. Companys considering these policies should proceed with extreme caution. Remember that the question of “can you do it” (i.e., is it legal?) is different from “should you do it?” (i.e., is it good business?)
