Bosses to employees: Shape up or pay up
BY FRANCINE KNOWLES Business Reporter email@example.com August 13, 2011 12:30AM
Updated: November 16, 2011 1:26AM
If you’re obese, smoke, have high blood pressure or high cholesterol, a growing number of employers want you to get fit — or else.
Workers who choose not to participate in employee wellness programs or make unhealthy choices are being hit with higher health insurance premiums, deductibles and out-of-pocket expenses, said Dr. Paul Berger, chief medical officer at Aon Hewitt, a human resources and benefits consulting company.
Meanwhile workers who participate in wellness programs are being rewarded with incentives, such as gift cards and contributions to health reimbursement accounts.
Employers are increasingly saying, “We want you to take some responsibility, and if you don’t do certain things we want you to do, you’ll only be eligible for the bad [health insurance[ plan with a $3,000 deductible as opposed to the $1,000 deductible,” Berger said. “That gets your attention.”
At Health Care Service Corp., which employs 16,000 people and operates health insurance providers including Blue Cross and Blue Shield of Illinois, the wellness programs include a focus on obesity and getting employees who smoke to quit. As an incentive, this year the company tied 5 percent of its yearly employee bonus plan to a companywide goal of losing 20 tons of weight. To help workers and their dependents quit smoking, the company’s initiatives include requiring smokers to pay more for their health insurance; reimbursing employees for nicotine replacement products, and providing one-on-one counseling. Since the programs were launched, the number of smokers has dropped from an estimated 22 to 25 percent of workers to 13 percent among those self-reporting, said Dr. Paul Handel, chief medical officer at the company.
At Advocate Health Care, employees can get up to $600 deposited in their health reimbursement accounts if they complete confidential biometric screenings. If the screening finds certain health risks, employees have to complete free health coaching and online assistance programs to get the reward.
At Allstate, smokers pay $50 more a month than nonsmokers for health insurance premiums.
Such initiatives and penalties are expected to expand because of continuing increases in health-care costs and changes under the federal health-care reform law. Employers can provide discounts or penalties of up to 20 percent on employees’ health insurance premiums for participation in wellness programs, including programs requiring them to quit smoking and lower their blood pressure and body fat, or face higher premiums. Under the health-care law, that maximum will rise to 30 percent in 2014, according to Aon Hewitt.
In a 2011 Aon Hewitt health-care survey about priorities over the next three to five years, 73 percent of employers cited offering incentives or disincentives to motivate healthy behavior, and 62 percent said promoting a culture of health.
A 2010 Aon Hewitt survey found employers impose or plan to impose penalties for:
† Smoking: 64 percent.
† Not taking part in disease management/lifestyle behavior programs: 50 percent.
† Not participating in biometric screenings: 45 percent.
† Not following recommendations to consult health coaches: 25 percent.
† Not making biometric improvements, such as lowering their blood pressure or losing enough weight to lower body mass index: 17 percent.
Such penalties are legal and governed by federal and state laws, including genetic anti-discrimination laws, the Americans with Disabilities Act and the Health Insurance Portability and Accountability Act, according to J.D. Piro, national practice leader for Aon Hewitt’s health-care legal consulting group.
But he noted that workers have to be offered alternatives when there are penalties. If a worker’s cholesterol level is too high and there’s a requirement to lower it or face a higher premium, and that’s unreasonably difficult for a worker, that worker must be offered an alternative such as taking cholesterol medication, he said.
The justification for the incentives and penalties is that unhealthy workers cost more in health insurance and lost productivity.
But employers aren’t required to prove exactly how much an employee’s poor health choices increase the company’s costs, and that’s unfair, said Lewis Maltby, president of the National Workrights Institute, a spinoff of the American Civil Liberties Union.
“If you smoke or are too fat because of your diet, and the company is charging you more than the cost you’re creating, you’re out of luck,” he said.
“Employers portray wellness programs as a benefit to workers, and sometimes they are,” he said. “ If you’re a smoker, and you want to quit, if the company will pay for the smoking-cessation program, everybody wins. You quit something you want to quit, and the company saves a lot of money on medical costs for practically nothing.
“But some wellness programs are coercive. They talk about giving certain employees a benefit, but the bottom line” for some employees is that their paychecks just got reduced.
Wellness experts say the programs aren’t aimed at punishing workers but are a recognition that when it comes to making healthier choices, some people are motivated more by the risk of losing $100 vs. gaining $100.