Companies are trying to figure out just how far they can go to keep their workers fit and healthy.
Employer wellness programs, designed to motivate employees to get in shape and address medical and lifestyle issues, have proliferated in recent years as bosses look for new ways to manage health-care costs. Nearly every major employer has some sort of initiative, many of which reward workers for their participation with discounts on insurance premiums or extra cash in their reimbursement accounts.
Those are the carrots. Sticks—adding a surcharge to premiums for those who don’t complete certain requirements, for example—are being applied as well. That’s due in part to the Affordable Care Act, which encouraged the growth of wellness programs by increasing both the maximum incentives and the maximum penalties employers may use.
The state of Maryland this week said its health and wellness program, required as part of insurance coverage, could bring penalties of as much as $450 per person by 2017 for those who fail to undergo certain screenings and fail to follow treatment plans for chronic conditions. The state said the program could save $4 billion over the next 10 years, according to news reports.
Workers at CVS Health Corp. who don’t complete an annual health risk assessment and health screening pay $600 more per year for their insurance premiums. CVS said the information is kept confidential by a third party and cannot be accessed by company management.
But employers are treading carefully when it comes to toughened wellness programs, lawyers and benefits executives say, as two federal lawsuits raise the volume on concerns about workers’ privacy and the border between voluntary and compulsory participation.
The suits, and the lack of firm guidance from the Equal Employment Opportunity Commission, which brought them to court, complicates an already fraught question: How to get involved in employees’ well-being without sowing discontent among the workforce or inviting legal and ethical complaints.
The EEOC has “thrown a fly in the ointment” by cautioning that wellness programs might violate the law when they are nominally optional but essentially required in practice, said Jim Napoli, a partner at employer-side law firm Seyfarth Shaw LLP.
One suit, filed last week, alleges that Flambeau Inc., a Wisconsin-based plastics manufacturing firm owned by Nordic Group of Companies Ltd., canceled the insurance coverage of an employee and shifted the full cost of his premium to him after he failed to complete biometric testing, which can include cholesterol or glucose checks, and a questionnaire about health risks.
The other suit, filed in August, claims Orion Energy Systems Inc., also in Wisconsin, essentially required employees to take medical exams and then fired a worker after she objected to the wellness program.
Orion declined to comment. A call to Flambeau wasn’t returned.
Both suits allege violations of the Americans with Disabilities Act, which forbids employers from requiring medical exams and making disability-related inquiries. The EEOC held hearings on wellness programs last year that addressed, among other things, concerns that the plans might single out people with specific conditions such as obesity.
The actions “will definitely have us take extra precautions,” said the head of benefits at a New York financial institution, who didn’t want to be named because of the current compliance spotlight on wellness.
Kristen Brown, benefits director at JetBlue Airways Corp. , said the “marketplace for wellness is new and ever-evolving.” The airline places as much as $400 a year into full-time employees’ health savings or reimbursement accounts for about 45 different activities such as signing up for smoking-cessation programs or completing an Ironman race. JetBlue canvasses workers annually and adds or deletes activities based in part on that feedback.
JetBlue is currently testing a program in the New York area with a company called LifeVest that ties monetary incentives of as much as $500 to measures like employees’ body-mass index. “You’ve got to see the real results. It can’t be something that’s a health game you can play online while still eating your bag of Doritos,” said Ms. Brown.
In terms of compliance, she said, “the key issue is making sure there are alternatives for someone who is incapable of getting the benefits [through a single component of the plan]. That’s one of the reasons we offer a lot of choices.”
Beyond legal and ethical issues, understanding what inspires people to improve their health is also a challenge, companies are finding.
At Johnson & Johnson , which has had a wellness program in place for decades, employees receive a $500 credit toward their annual medical premium if they participate in a health assessment as well as health coaching. In 2010, the company created an additional incentive to reward obese and overweight workers who reduced their weight by 10%. That effort was discontinued in 2012 because of low participation, said Fik Isaac, J&J’s vice president for global health services.
“They were not interested in taking J&J up on the offer,” he said. Instead, the company is focusing on non-monetary campaigns, such as a walking program that recognizes people who take more than one million steps in a year.
Workers are wary of anything that smacks of coercion or discipline. In a June poll by the Henry J. Kaiser Family Foundation, 62% of those surveyed said it is inappropriate for employers to require workers to pay more for their health insurance premiums if they don’t participate in wellness programs, and 74% said companies shouldn’t charge higher premiums if employees don’t achieve predetermined health goals.
On the other side of the equation, employers are stymied by the difficulties of measuring the financial and health impact of wellness programs that can be as varied as providing an advocate to manage a worker’s heart-transplant process to hosting walking challenges that use FitBit, a fitness tracking bracelet.
A September report from the Bipartisan Policy Center’s CEO Council on Health and Innovation found that “results of studies about the return on investment of wellness programs are mixed.”
Despite that, the use of incentives appears to be on the rise. Seventy-four percent of employers with wellness programs planned to offer incentives this year compared with 57% in 2009, according to the National Business Group on Health. The median incentive has risen to $500 from $338 in 2010.
Even carrots, however, have some employers nervous. The New York financial firm offers incentives in the form of gift cards for workers who complete health assessments and screenings, but has shied away from discounts on premiums. “We’re just not there yet and given everything that’s going on, I’m not sure it’s a good place to be,” the executive said.
—Adam Auriemma contributed to this article.
Corrections & Amplifications
Jim Napoli is a partner at law firm Seyfarth Shaw LLP. Also, JetBlue Airways is currently testing a program in the New York area with LifeVest that ties monetary incentives of as much as $500 to measures including employees’ body-mass index. An Oct. 7 version of this article incorrectly provided the name of Mr. Napoli’s previous employer Constangy, Brooks & Smith LLP, and only body-mass index was noted as a measure for JetBlue’s program with LifeVest.
Blog Source: WSJ | Wellness Programs Get a Health Check