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 health problems that send costs through the roof.
A small, but quickly growing number of companys are taking desperate measures to avoid the costs associated with these employees. The step could be broken down into three levels of aggressiveness and potential risk/reward.
Level one – the employer installs a health promotion program in which non-tobacco use staff members and those who commit to maintaining a healthy weight receive financial incentives that lower their share of monthly insurance premiums.
Level two – the business 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 business docks pay or fires staff members who fail to control their lifestyle-related health risks. Example – A business called Clarian Health has sent notifications to staff members that beginning in 2009, staff members 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 a few conditions.
Health Promotion incentives walk a fine line in terms of HIPAAs non-discrimination rules. It’s legal to reward staff members for wellness participation but its illegal to punish those who fail to improve their health.
Example – If an staff member follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. In like manner, when an staff member fails repeated tries to quit tobacco use, you’re still legally obligated to give them another shot next year.
Likewise rememberthat, by law, the size of the reward or penalty under your wellness program cant exceed 20% of the total cost of coverage.
The other two are still largely uncharted waters in the courts. Corporations 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?)
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