Can you dock smokers and overeaters?
September 2, 2008 by Bill MeltzerPosted in: In this week's e-newsletter, Latest News & Views, Wellness
Studies show that roughly five percent of employees drive about 80% of your health benefit costs.
No shocker here: Smokers and obese employees are the highest risk group for developing the sorts of chronic health 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 employees. The step can be broken down into three levels of aggressiveness and potential risk/reward.
Level one: The employer installs a wellness program in which non-smoking employees 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 assessment as a condition of being hired.
Level three: The employer docks pay or fires employees who fail to control their lifestyle-related health risks. Example: A company called Clarian Health has sent notifications to employees that starting in 2009, workers who smoke or chew tobacco will be charged $5 per paycheck.
Are these strategies legal? At level one, the answer is a qualified yes. HIPAAs non-discrimination rules permit such incentives under several conditions.
Wellness incentives walk a fine line in terms of HIPAAs non-discrimination rules. It is legal to reward employees for wellness participation but its illegal to punish those who fail to improve their health.
Example: If an employee follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. Likewise, if an employee fails repeated tries to quit smoking, you’re still legally obligated to give them another shot next year.
Also keep in mind that, 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. Keep in mind 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?).
Tags: cost savings, health benefits, Wellness
April 3rd, 2008 at 1:33 pm
Docking pay from an exempt employee for smoking or chewing tobacco has the potential to not meet the FLSA salary basis test that stipulates payment of a designated salay without regard to the quality of quantity of work performed. This docking example has the potential to not meet the quality of work performed definition by being an “Improper deduction”.
April 4th, 2008 at 10:53 am
As an HR manager I can’t believe you would report and/or support this type of behavior in the workplace. Will ugly employees receive incentives to have plastic surgery (not covered by the company health care policy)? Will drunks, dope addicts, abusers, etc. receive incentives to attend therapy, rehab, etc. (again, many of the programs are not covered under helath plans)? An employee who bites their nails and is “public” for the company – will they receive incentives to have weekly manicures? Bald employees receive incentivews to purchase “hair growth” products? Where will this end?
April 8th, 2008 at 9:42 am
All I have to say is: YOU’VE GOT TO BE KIDDING!!!! Clairian Health, you better step lightly!!!!
April 14th, 2008 at 2:16 pm
United Healthcare is testing a health plan that starts with a $2500 deductible, then gives $500 deductible credits to employees for four different things – two of which are not smoking and meeting liberal BMI standards (they aren’t looking for model material, just non health risk weights). If they meet all four sections, the employee has a $500 deductible. I think this is the best strategy.
June 23rd, 2008 at 12:09 pm
What happened to pay incentives for people who do the most work? In my facility, the thinnest people do the least and spend work time in the gym. The heaviest are eating at their desk because they have been given so much to do. Surely no one is stupid enough to think that overweight people are at risk only for their size. Stress and workload are big factors.
September 2nd, 2008 at 10:56 am
It’s ridiculous to compare plastic surgery, manicures, etc. to the clear and proven benefits of reducing obesity and smoking cessation. I would think people like Ms. Futrell who purports to be an HR manager would know that an employee who smokes costs her employer a great deal more than one who is ugly or bites her nails. Please. Gross oversimplifications and hysteria don’t advance the debate. Discuss the program on its merits.
September 2nd, 2008 at 11:08 am
Ms. Thacker – I don’t even remember posting this comment. However – 4 months after the fact, I am offended that you would question my qualifications and be so ugly in your reply. This forum is meant to make us think of others views – not attack one another.
September 4th, 2008 at 2:10 pm
So what if you are too skinny – will you be required to put on weight?
September 4th, 2008 at 2:49 pm
Wasn’t there a large study done recently proclaming that overweight people are not necessarily less healthy than skinny people. We have plenty of people at our job that are skinny minnies and are always at the gym and have strange diseases that require lots of doctors. That simply is the fact. People that dont eat will look thinner but will be at risk for many different diseases.
September 4th, 2008 at 3:29 pm
Well, let’s just take this all the way out to the limits. Several ethnic groups are more at risk for certain high cost medical conditions (either themselves or their dependents). Would we then look in the face of Title VII and start eliminating them from employment next if all we are concerned with is who MIGHT cost the company more money? This isn’t as far fetched as you may think. It’s the likely progression. Just because overweight and smoking are things that are visible does not mean they should be singled out. There are so many more health issues that would cost the company money that aren’t visible. What discrimination! And what a horrible departure from the HR concept of valuing each employee and being focused on if and how they do the work!
I have a very overweight friend who plays 2 hours of tennis every day and can hike to the bottom of the Grand Canyon in record time. She is an outstanding business professional and has made numerous contributions in high level public secot jobs she has held. Would we all deny her assets because she “might” cost her employer more in benefits.
September 4th, 2008 at 4:18 pm
I find it disturubing that an HR Manager, Ms. Debbie Futrell (April 4, 2008) would refer to someone who suffers from the disease of addiction as “drunks, dope addicts, abusers, etc.”. Where’s the cultural sensitivity/diversity in that statement? Or do you simply not have any of “Those people” employed by your firm in your perfect world?
September 5th, 2008 at 9:22 am
In my humble opinion, I hire candidates that are qualified for the job. If we have to make accomodations, we do, i.e., a larger chair. Some of our very best employees are overweight and smoke. We deal fairly with the disease of addiction by encouraging them to seek treatment, but we hold them to the same attendance policies that we hold our smokers and overweight staff to, and expect them to do their jobs like everyone else. Nothing is different. I’ve also found that our particular health costs are not driven up by the obese and smoking staff. Our cost drivers are more the MRI’s, births, gallbladders, hysterectomies, and injuries that come with things likebicycling and otherwise “healthy” activities. Another major cost driver for us is the cost of prescriptions. In this day we are living in, why should the workplace add even more pressure to the staff? I feel that the insurance companies have enough control over things and in no way should be able to discriminate against us. Who knows, as HR people, we might eat too much candy, or start smoking AND drinking!!
September 5th, 2008 at 9:47 am
Whew! Why all the animosity? This article raises some interesting questions that certainly need to be addressed to prevent extremes, abuses and discrimination. But if we don’t address them logically, we become part of the problem instead of part of the solution.
Personally, I like the idea of rewarding people for not smoking or for trying to quit. I think there is enough factual research data to clearly indicate smoking greatly increases the risk of several major diseases. If an incentive can help people have the motivation to try to quit, everyone benefits. If they don’t want to try to quit, they would logically carry more of the burden of the expense incurred because of their choice.
Regarding obesity, the data isn’t clearly supportive. As has been mentioned, many overweight people are very healthy. Many often exercise more than those of a “normal” weight because they are always attempting to reduce. Some people have good genes and can eat in a very unhealthy manner, yet maintain an ideal weight. While there does seem to be an increased risk of diabetes and high blood pressure with the obese, for example, the overwhelming number of people who are overweight who do NOT have these problems would lead a person to think there has to be more to the equation. I think the emphasis should be on living a healthy lifestyle and not specifically on weight reduction.
The underlying problem that has prompted the punitive wellness plan thought process is out of control costs related to medical care. Everyone is trying to figure out what to do to contain this ridiculously escalating expense.
In my mind, insurance coverage largely addresses symptom / disease treatment and control rather than taking a more proactive stance in covering those services that help prevent illness. This is rather ignorant, in my opinion. We need to offer coverage for mental health care, addiction and addiction-related care, screening and prevention types of care because these all play a part in preventing major medical problems before they start or allow a problem to be caught earlier so it is more easily and successfully treated. I think people and institutions / companies are beginning to see this and things are slowly changing. As the pendulum swings, we need to try to eliminate extremes on either side. This means not being punitive in the way we administer our health insurance and wellness programs, but rather to reward individuals making wise choices regarding those factors they can control.
Discrimination is never right…there is no excuse for it, ever. And we can’t control all of the factors involved in medical illness. Bad things happen to people who do everything right…just like some people who never do anything right never have health problems. The escalating expense problem isn’t going to be easily solved and we need to be careful to approach any proposed solutions with logic, common sense and respect for others clearly in the forefront of our mind.
September 5th, 2008 at 1:40 pm
R.B. said it all so eloquently. This sums it up perfectly!
September 5th, 2008 at 3:11 pm
I think we can all agree that health costs and insurance coverage has sky-rocketed. A few incentives for healthy life styles is wonderful but we are heading for a fine line. Stepping over it, we will find ourselves discriminating against those with medical illnesses, chronic or not and disabilities because it might “cost us.”
Working with students with disabilities in a state institution – I am astounded daily by their stories of people on the street, on the bus, in the halls, in our offices, by our own instructors treating them with animosity based on perception.
I agree with R. B.! We need to tread lightly! It could be anyone of us, any day, though no fault of our own, that we find ourselves in that wheelchair, unable to GET medical insurance and having to wait for someone to help us dress so we can go to rehabilitative services. We need to remember that EVERYONE, regardless of race, creed, age, sex, gender, sexual orientation, ability, etc. deserves respect. We need to charge the medical and insurance systems in this country with better business practice instead of paying out United Healthcare CEO 1.1 BILLION for 5 years of work.
September 8th, 2008 at 10:02 am
What if it’s the spouse or dependent covered by the employee’s healthcare who is smoking and overweight. Is it legal to charge a higher premium because their family is “unhealthly” not the employee? I think this could be a real challenge just putting some checks and balances in place. Do self insurers have different rules?
October 16th, 2008 at 2:51 pm
How about this one. Our “Health Insurance policy” costs me $6.00 per week for a $250.00annual deductible. Not bad! No Eye, No dental, but we do have a prescription plan. Here’s the glitch, Anyone on the policy with ED can get Viagra or one of the other “drugs” at reduced costs. Smokers wo want to quit can get assistance and medication at reduced cost. Likewise with those addicted to prescription or non prescription drugs can get treatment and meds. I am deaf in one ear, and have a 60% loss in the other. The insurance company does not consider it to be necessary for me to hear to do my job, but a woman who has a masectomy can get “replacements” under the plan. I can’t get a hearing aid because it’s not considered a prosthesis. If you’re interested look up “prosthesis” in the dictionary and see what you think. By the way, my job titlle is Director of Safety and Health and Manager of Human Resources. Tell me the Health Care System is not flawed!!!! Your comments are MORE than welcomed.