Can You Dock Smokers and Overeaters?
Studies show that roughly five% of staff 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 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 corporation installs a wellness 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 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 company docks pay or fires workers who fail to control their lifestyle-related health risks. Example – A company called Clarian Health has sent notifications to workers that beginning in 2009, workers 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. health insurance portability and accountability act (HIPAA)s non-discrimination rules permit such incentives under a few conditions.
Wellness incentives walk a fine line as for HIPAAs 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 – If an employee follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. Similarly, if an employee fails repeated tries to quit smoking, you’re still legally obligated to give them another shot next year.
Additionally rememberthat, by law, the size of the reward or penalty under your wellness program cant exceed 20 percent of the total cost of coverage.
The other two are still largely uncharted waters in the courts. Businesss 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?)