Note to readers: before reading this post, you may want to read the post below which questions just how effective workplace wellness programs really are.
Often, Workplace Wellness Programs use financial carrots to reward employees who participate.. In some cases, workers will not have to contribute as much to their health care insurance premium if they “get with the program” and meet specific standards related to their health. Typically, these “outcome-based wellness programs” offer discounts to employees who quit smoking, or who meet specific metrics for blood pressure cholesterol or body-mass index.
Even if a company doesn’t use financial “sticks,” the carrots can mean that some employees contribute far less to the cost of their insurance.. The employer must make up the difference, and as a result, he is likely to make the “standard” employee contribution that much higher. Thus, employees who don’t receive the discount help subsidize the carrots for their co-workers.
Is This Fair?
Last week, the Obama administration issued new rules which say that under reform, wellness program rewards can equal 30 percent of the cost of coverage, defined as the total amount that employer and employee contribute to premiums (Under current law, discounts are limited to 20 percent.) The regulations also allows a reward of up to 50 percent for employees involved in programs designed to prevent or reduce smoking.
The new rules, issued by the Labor, Treasury and Health and Human Services departments, gives this example of a permissible wellness program: “The annual premium for coverage in an employer’s group health plan is $6,000, of which the employer pays $4,500 and the employee $1,500. The employer offers a $600 discount to employees who participate in a wellness program focused on exercise, blood sugar, weight, cholesterol and blood pressure.
At the same time employers will be able to hike premiums for smokers by 50 percent .
Penalties Could Mean That Workers Will Be Forced to Opt Out of Insurance
“This could make insurance unaffordable for some workers, and keep the sickest workers from affording the care they need,” Alan Balch, vice president of the Preventive Health Partnership, an alliance of the American Cancer Society, the American Diabetes Association, and the American Heart Association, recently told Business Week. In that case “Wellness Program” penalties could undermine a major aim of the Patient Protection and Affordable Care Act—ensuring that all Americans have access to insurance.
The Obama administration recognizes the problem. It realizes that some employees may suffer from medical conditions that make it difficult or impossible for them to achieve specific clinical goals.
While the Affordable Care Act encourages “wellness programs” the legislators who wrote the law made it clear that wellness programs must not be “a subterfuge for discriminating based on a health status factor.”
If we don’t want insurers to “shun the sick” by charging them more, we certainly don’t want their employers to discriminate against them.
For that reason, the new rules stipulates that companies cannot use these programs to penalize workers who suffer from illnesses such as diabetes or heart disease: If an employee cannot met a specific metric and an employee’s doctor says the standard is not appropriate for that worker, the employer-sponsored insurance plan “must provide a reasonable alternative standard that accommodates the recommendations of the individual’s personal physician.” In this way, employees can qualify for rewards even though they fail to meet the initial standard.
For example, an employer could charge higher premiums to employees who smoke. But the employer would have to offer an alternative means for employees to avoid the penalty — for instance, by participating in a smoking cessation program.
And if an employer rewards workers who stop smoking, the rules state that he also will have to reward those who attend a smoking cessation seminar “regardless of whether the individual quits smoking.”
To many this might seem too lenient. If someone wants to quite smoking, they should be able to do it, right? Not necessarily. A large percentage of smokers suffer from mental health problems–typically chronic depression or anxiety. By smoking, they are self-medicating.
Over time, they may be able to quit.. But often, not until they receive some help–and that can take a year or more. We know that medication does not suddenly make depression or anxiety disappear. Typically, physicians have to try several medication before they hit on one that seems to help that particular patient.
Individual circumstances also can make quitting all but impossible at a particular point in time. Frequently, divorce, the loss of a job, the death of a loved one or another life-changing blow causes someone to return to smoking.
Finally behavioral scientists tell us that negative reinforcement–the threat of a financial penalty–is far less likely to help a depressed smoker than positive reinforcement.
Health Advocates support the new regulations. Ron Pollack, executive director of Families USA, puts it this way: “These rules will help ensure that wellness programs are designed to actually promote wellness, and that they are not just used as a back-door way to shift health-care costs to those struggling with health problems.”
Still, not all consumer advocates are happy with the regulations.. At a hearing of the Equal Employment Opportunity Commission, Judith L. Lichtman, a senior adviser at the National Partnership for Women and Families, said that penalties in wellness programs could have “an unjustified disparate impact” in violation of civil rights laws.
Others point out that a single 28-year-old male who leaves work every day at 5 and goes to the gym is in a very different position from a mother who must pick up her daughter at day care and then go directly home to make dinner, bathe her and put to her to bed by 8.
No doubt someone is wondering: ‘why can’t the mother go to the gym before work? At 6 a.m. she’s up feeding and dressing her child, before taking her to daycare, then catching a bus to work .On week-ends, she and her husband clean the house, run errands, and play with their 4-year-old. Should she pay more for health insurance if she can’t lose 20 pounds?
Some Employers Object to the New Rules
Some employers say “yes.”
“The regulations will complicate wellness efforts,” Helen Darling, president of the National Business Group on Health told the Washington Post.“The rules give workers more leeway to seek changes in wellness targets they can’t meet due to health conditions and to have their doctors suggest alternative measures,” Darling observed. “There’s a danger that could tie up employers in protracted negotiations over health goals,”
She worries that employers will say the more likely they are to say, “we don’t need this hassle,’” and will cancel wellness programs..
But I would argue that if a worker’s physician says that the target an employer has set is unreasonable, the employer should have to change the target for that particular employee. After all, the employer is not a doctor, and knows far less than the physician about what is best for that worker’s health.
This is one reason why the move to tie workers’ costs to their health is being examined by the U.S. Equal Employment Opportunity Commission to see whether such programs violate anti-discrimination laws. California’s legislature also is considering a bill that would bar linking financial rewards to a worker’s health status. If employers set up wellness programs without trying to use financial carrots and sticks to motivate employees, these programs would be much less controversial.
Finally, and most importantly, as the post below reveals, studies done by medical researchers suggest that there is scant evidence that “worker wellness programs” actually improve health—or reduce health care spending.
Virtually all of the positive about these programs come from the vendors who sell them. For wellness consultants, workplace wellness has become a $6 billion dollar industry