Employers Use Stick-and-Carrot Approach For Wellness Programs

Main Category: Health Insurance / Medical Insurance
Article Date: 05 Dec 2007 - 11:00 PDT

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Some employers are "wielding a stick as well as a carrot" by encouraging workers to "kick unhealthy habits" and enroll in employee wellness programs or contribute more to their health care costs, the Wall Street Journal reports. In most states, people with health conditions who are enrolled in individual insurance plans already pay higher premiums, while "federal law dictates that all workers covered under the same plan must pay the same premium irrespective of their health," according to the Journal. However, recent legislation has allowed some exceptions to the rule through the use of wellness programs. Now, employees at some companies who have unhealthy behaviors or risk factors -- such as obesity, high cholesterol or smoking -- will pay more for health care if they do not participate in supplementary wellness programs offered by employers. "In extreme cases, employees' deductibles could rise by $2,000," the Journal reports.

According to the Journal, smaller employers --"who are the most at risk from rising health costs -- have gone the furthest in forcing unhealthy employees to pay more for insurance, as they struggle to continue providing coverage." Tom Parry, president of the Integrated Benefits Institute, said, "The bottom line is that employers want to see results." However, the "stick" approach could be risky and make employers the target of lawsuits for "meddling in workers' lifestyles," the Journal reports. The U.S. Equal Employment Opportunity Commission is looking into the programs to determine whether they sometimes violate the Americans With Disabilities Act, according to the Journal (Knight, Wall Street Journal, 12/4).

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