Studies show that roughly five% of workforce drive about 80% of your health benefit costs.
No shocker here – Smokers and obese staff 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 staff. The step may be broken down into three levels of aggressiveness and potential risk/reward.
Level one – the company installs a health promotion program in which non-tobacco use staff 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 company docks pay or fires staff who fail to control their lifestyle-related health risks. Example – A company called Clarian Health has sent notifications to staff that starting in 2009, staff who smoke or chew tobacco are going to be charged $5 per paycheck.
Are these strategies legal? at level one, the answer is a certified 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 respecting health insurance portability and accountability act (HIPAA)s non-discrimination rules. It is legal to reward personnel for wellness participation but its illegal to punish those who fail to improve their health.
Example – When an staff member follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. Likewise, when an staff member fails repeated tries to quit tobacco use, you’re still legally obligated to give them another shot next year.
Also keep in mindthat, 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. Employers 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?)
