Employers, frustrated with how growing health care costs for their employees are eating into their bottom line, are experimenting with incentives for workers to get healthier so as to minimize long-term company spending on health care. Smoking-cessation and weight loss programs are now a growing part of employee health plans, with employees rewarded for “good behavior” with lower monthly premiums, or penalized for “bad behavior” with fines – or in one lawsuit-inducing case, firing. IBM, which sponsors a smoking-cessation program for its employees, is about to expand these financial incentives to employees who enroll their children in obesity education.
Often, an outside firm is retained to manage the incentive program or create on-site fitness programs. While there’s not a lot of data to show these methods are working to cut employer spending on health care, almost half of the nation’s large employers are trying them out, with that portion expected to reach 75% in 2008. What is known is that people will lose weight for cash rewards – even small ones.
But many allege that offering healthy employees what is essentially cheaper health insurance via wellness rewards unfairly penalizes those who are sick through no fault of their own. The Department of Labor now agrees and are closing the legal loopholes in the Health Insurance Portability and Accountability Act that have made way for such programs. HIPPA was intended in part to make sure employers charge their employees the same price for benefits regardless of health. The new DOL rules apply to employers who allow workers to earn “wellness credits” to offset the cost of copayments and deductibles in high-deductible health insurance policies.
SEEKING SAVINGS, EMPLOYERS HELP SMOKERS QUIT
by Milt Freudenheim
The New York Times
October 26, 2007
COMPANIES PENALIZING WORKERS WITH HIGH HEALTH RISKS
USA Today/Associated Press
September 9, 2007