Should Unhealthy Workers Pay Penalties?

Posted by Kristina Cowan

Clarian Health Partners, a hospital chain based in Indiana, in 2009 will start charging workers who smoke, are overweight, or have high blood pressure, blood sugar or cholesterol. (See stories in BusinessWeek and the Chicago Tribune, and the Today Show blog).

The plan, which could charge workers up to $780 a year, has drawn fire from opponents. According to the Chicago Tribune story:

Lewis Maltby, president of the National Workrights Institute, a Princeton, N.J.-based employee rights group, called the trend "a very dangerous road that could lead to employers controlling everything we do in our private lives."

The BusinessWeek story says other employers are interested in Clarian's approach, quoting one source who says it might be a trend.

But is Clarian doing the right thing?

Taking Responsibility

Clarian's approach is wrongheaded. It underscores the sorry state of U.S. health care, which the next president, along with Congress and industry, must fix. But charging someone who's overweight isn't going to repair our broken system; it's only going to irritate working men and women and likely lead to pricey legal battles. It's also unfair to those who have medical problems beyond their control that may lead to obesity or other conditions.

Though some say corporate incentives for employee health only go so far, they're a better tack to take, at least until our political and corporate leaders get their act together. 

That said, America does need to get healthier, and the seed of change must be planted in families. Statistics about obese children are maddening (see a related Reuters story)--we should make sure they don't get addicted to junk food, fast food and soft drinks. Exercise, too, ought to be a theme from the very beginning. We've become such a car culture that we'd rather drive to the corner store than walk. The conveniences of our great nation have, I'm afraid, gone into overdrive when it comes to our waistlines.

And we should take a cue from our European friends, who enjoy top-quality produce, meat and poultry and sensible portions. The old adage says you are what you eat, and if you're eating too much of a bad thing, well ...

Clarian's Plan

According to the BusinessWeek story, Clarian will:

fine employees $10 per paycheck if their body mass index (BMI, a ratio of height to weight that measures body fat) is over 30. If their cholesterol, blood pressure, and glucose levels are too high, they'll be charged $5 for each standard they don't meet. Ditto if they smoke: Starting next year, they'll be charged another $5 in each check. ...

But some employment lawyers and wellness program administrators believe Clarian's approach may not be so unusual in coming years. They see employers, already overwhelmed by rising health-care costs, getting more aggressive in mandating changes in employee behavior. Garry Mathiason, a senior partner at employment law firm Littler Mendelson, says more than 300 companies have requested its assistance on mandatory wellness initiatives since it released a study on the topic in April. "In reality, you only get a certain amount of participation with incentive and encouragement," he says. ...

What's more likely for employers who start measuring health results is that they will provide carrots. In July, UnitedHealthcare began offering a new plan targeted at small businesses called Vital Measures, which combines a high-deductible insurance plan with a supplemental plan that provides discounts for healthy outcomes. Members who choose to participate will receive $500 discounts toward their deductible for each cholesterol, blood pressure, and BMI level they meet, along with refraining from tobacco use or taking a health risk assessment.

• Being Unhealthy Could Cost You—Money (BusinessWeek)
• Too Heavy For Our Team? (BusinessWeek)
• COMPANY FINES WORKERS FOR BEING OVERWEIGHT (Official blog for the Today Show)
• Employer To Obese Employees: Shape Up Or Pay Up (NBC5.com/WMAQ Chicago)
• Health policies make workers shape up or pay up (The Chicago Tribune)
• Fighting childhood obesity (Reuters.com)
• Overweight and Obesity (The Centers for Disease Control and Prevention)

Comments

[Mike Chapman]

The issue to frame here is not the "heavy handedness" of Clarian's approach. The issue is individual employee accountability, or the lack of it, and how it impacts the bottom line of the business enterprise and the family pocketbook.

Obesity, sedentary lifestyles, and tobacco use among employees leads to diabetes, heart/circuatory diseases and strokes. These lifestyles cost employers billions of dollars a year in additional health claims and health insurance premiums, productivity losses and lost wages.

These unhealthy lifestyles also costs workers, both healthy and unheathy, billions of dollars in additional premiums. Is it fair that an employee who stays fit must pay the same for their insurance as the employee in the office who is a "walking time bomb" and weighs too much, eats, drinks and smokes too much, and never exercises?

Yet this lack of individual employee accountability is what our country's employer-backed group health insurance system allows. The employee who takes responsibility for maintaining a healthy lifestyle pays the same out of their paycheck as the employee who is a heart attach waiting to happen.

Insurance coverage for an employee with a family of four costs about $12,000 per year. If the employer pays 75% of the employee only cost, that means the employee is responsible for about $10,000 in medical insurance premiums to cover the employee's family. At current inflation rates, the average employee is facing premium inflation of about $1,000 per year to cover their family.

This is very burdensome for the average worker. When presented with the facts that a key reason that they are paying more every year for their family's health insurance is because their fellow employees aren't taking better care of themselves, healthy employees will welcome any plan that holds individual employees accountable for their own health.

A well-designed employee wellness plan coupled with the right benefits design can encourage employees who want to improve or maintain a healthier lifestyle, and give incentives to those employees who do so.

New HIPAA regulations issued in July allow employers to "reward" employees who participate in a wellness program, or who maintain or improve a healthy lifestyle. GroupBenefitsAdvisors.com helps employers incorporate an employee wellness plan that offers monetary "rewards" within the guidelines of the revised HIPAA laws. With a slight raise in the group health insurance plan deductibles, the employer can cover the costs associated with the wellnes plan, and implement a benefits plan that holds employees accountable by rewarding "healthy lifestyle" employees and penalizing "unhealthy lifestyle" employees.

[kitty]

Mike, what about their LDL, blood pressure and other metrics?
There are a lot of us who are slim, eat right food, exercise regularly, don't smoke and our LDL is still above the Clarian metrics because of our genes. Are we suppose to take drugs (even if they are not indicated because for example our 10-year heart desease risk is under 1% in spite of LDL) simply because our insurance says so. Are policy-makers suddenly qualified to decide who should take drugs?

Moreover, none of these measures have been proven to be cost-saving. Just to get everybody's LDL below 130, many people will have to take drugs. So, yes, if you treat 250 for 10 years, you may prevent one heart attack, but the cost of treatment for all these people will be much higher than the money saved on one person. Ever heard of the wonderful term "Number needed to treat"? Look it up.

Really all these policy-makers should learn some epidemiology. They are clueless in their belief that preventive medicine is money-saving. How about the cost of treating injuries in all the obese people who start exercising?

[Paolo]

If you look at the fine print on the federal side of things, there are a number of gotchas that these types of programs will have to contend with. If you can show a genetic propensity for high LDL, then you can get a waver. I've even seen situations where you can get a "smoking waver" if you can get a doctor to attest to your "nicotine addition".

The later is BS, but in the US for every doctor there's a corresponding lawyer.

Instead of charging employees, I prefer the discount off the premium approach. Essentially the same thing, but it says to those lazy employees, "you can still pursue your unhealthy lifestyle, but don't expect any discounts on your healthcare premium". It's more of a reward the healthy versus punish the unhealthy.

If you have genetic issues, then get a waver. If it's a privacy issue, go work for yourself.

[Bob]

Pretty soon, our corporate "employers" will have power of attorney over us. They will be our parents, doctors, lawyers, and nannies. Employers will have the legal right to poke, prod, and dissect us at will.

The company inspector will visit our homes every once in a while to make sure that the house is up to their "metrics".

How can this happen? How can your employer check your body fat? Isn't that personal health information? Do we no longer have a right to privacy?

So I guess that in order to get a job these days, people must surrender their constitutional right to privacy over their bodies. What's the point of having statutory rights if the rights are nonexistent in practice?

This does not bode well for FREEDOM.