Can You Dock Smokers and Overeaters?

Studies show that roughly five% of workers drive about 80% of your health benefit costs.

No shocker here -  Smokers and obese staff members are the highest risk group for developing the sorts of chronic health problems that send costs through the roof.

A small, but quickly growing number of corporations are taking desperate measures to avoid the costs associated with these staff members. the step can be broken down into three levels of aggressiveness and potential risk/reward.

Level one -  the employer installs a wellness program in which non-use of tobacco staff members and those who commit to maintaining a healthful weight receive financial incentives that lower their share of monthly insurance premiums.

Level two -  the employer disqualifies job candidates who smoke or are significantly overweight from hiring consideration. Alternatively, some firms require new hires to undergo a health risk (assessment|appraisal} as a condition of being hired.

Level three -  the corporation docks pay or fires staff members who fail to control their lifestyle-related health risks. Example -  A corporation called Clarian Health has sent notifications to staff members that beginning in 2009, staff members who smoke or chew tobacco will be charged $5 per paycheck.

Are these strategies legal? at level one, the answer is a qualified 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 respecting health insurance portability and accountability act (HIPAA)s non-discrimination rules. It’s legal to reward workers for wellness participation but its illegal to punish those who fail to improve their health.

Example -  When an worker follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. Similarly, if an worker fails repeated tries to quit smoking, you’re still legally obligated to give them another shot next year.

Also rememberthat, by law, the size of the reward or penalty under your wellness program cant exceed 20% of the total cost of coverage.

The other two are still largely uncharted waters in the courts. Employers 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?)