Can You Dock Smokers and Overeaters?
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 medical problems that send costs through the roof.
A small, but rapidly growing number of businesss 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 business 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 corporation 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 corporation called Clarian Health has sent notifications to employees that starting in 2009, employees who smoke or chew tobacco are going to be charged $5 per paycheck.
Are these strategies legal? at level one, the answer is a licensed yes. HIPAAs non-discrimination rules permit such incentives under several conditions.
Wellness incentives walk a fine line respecting health insurance portability and accountability act (HIPAA)s non-discrimination rules. It is legal to reward staff 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. In like manner, if an employee fails repeated tries to quit use of tobacco, you’re still legally obligated to give them another shot next year.
Additionally keep in mindthat, by law, the size of the reward or penalty under your wellness program cant exceed 20 percent of the sum cost of coverage.
The other two are still largely uncharted waters in the courts. Businesss 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?)