Employers Gaining Leverage for Aggressive Wellness Initiatives

As the popularity of corporate health and wellness programs continues to grow, more employers are getting aggressive in their tactics. While some are using incentives (or “carrots”) to enhance program participation and reward positive health outcomes, others are using disincentives (or “sticks”) to penalize employees for non-participation or poor health outcomes – and several more are using a combination of the two. The increase in these types of actions is an indication that many employers are no longer willing to sit on the sidelines while the costs of healthcare continue to skyrocket. But what is surprising is that these employers are actually gaining more latitude for their aggressive plans through recent actions in other states. Here are some examples of these emerging trends from across the nation:

Alabama Incenting Health Screenings for State Employees
As the State of Alabama continues the launch of one of the most aggressive employer wellness plans in the U.S. (as noted in the Eyes on Benefits dated September 12, 2008), state government has already incented over 76% of its 37,500 employees to participate in wellness screenings for life-threatening illnesses. Under the conditions of the program, any state employee that is not screened by January 2011 will have to pay an additional $25 monthly fee to maintain their health insurance through the state.

Early results of the screenings have already helped to identify serious health risks among state employees, and the state’s insurance board credits the high participation level to the financial stipulations of the program. In addition, while Alabama’s plan has drawn criticisms and accolades alike, the fact that this program has been instituted successfully (to this point) on the state level speaks to the support it has gained from the state legislature. For more information, see Most Alabama State Employees Complete Health Screenings.

Massachusetts Judge Rules in Favor of Employer-Mandated Wellness
In a recent court case, a Massachusetts federal judge dismissed a lawsuit by an employee who had started working under the contingency of successful completion of a nicotine test and had been terminated after he tested positive. This decision gained significant discussion in relation to employer-mandated initiatives and brought more light to the wellness program at Scotts LawnService. As part of the program, Scotts’ enforces a tobacco-free workplace policy that requires employees to remain tobacco free in AND out of the workplace, and makes new hires contingent upon successful completion of a nicotine screening. This policy was challenged by the plaintiff on the grounds that it violated several state and federal employment regulations. However, the court eventually dismissed the wrongful termination claim after finding that the Scotts’ policy was not in violation of any of the laws, and in its statement noted that public policy is “more aligned with efforts to suppress or discourage smoking than with the protection of the 'right to smoke’.”

While the plaintiff has filed an appeal, this decision has put more focus on the legalities surrounding employer-mandated health and wellness programs. It remains to be seen how the appellate court will rule, but the effects of the current decision may linger for some time. For more information, see Court Extinguishes Smoker’s Claims

Employers Paying More for Wellness Incentives
Recent data suggests that employers are getting more aggressive with their incentives despite the tough economic times. An online employer survey by Health2Resources found that the average corporate wellness cash incentive has increased from $204 in 2008 to $329 in 2009. The study also found that these incentives, which range from $1 per pound for weight loss to annual premium reductions valued at more than $1,500, are just as popular with small employers as they are with large businesses. In addition, 83% of the employers surveyed say these programs return better than 1:1 on their investment. These figures offer yet more support for the use of incentives as part of an aggressive wellness campaign. For more information, see Paying Employees to Lose Weight.

Aggressive Wellness Measures in the North Carolina Market
While these examples indicate a growing trend of increased employer leverage for aggressive wellness initiatives, businesses in North Carolina seeking to initiate similar measures may be limited or restricted by various state laws, such as the NC Smoker Protection Law (NC Gen. Stat. 95-28.2) that protects employees from discrimination due to off-the-job use of a “lawful product” (i.e. tobacco). Employers looking to engage in aggressive wellness programs are typically urged to seek legal counsel before doing so. Should you have any questions about these types of programs, please contact our office at 919-403-01986.

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Don't forget to visit the HCW Wellness Corner at www.hcwbenefits.com!

By visiting the HCW Wellness Corner, employers can order various resources to help them initiate, strengthen and/or enhance their wellness initiatives. Best of all, these resources can be sent directly to the employer completely FREE OF CHARGE!

So visit the HCW Wellness Corner today at www.hcwbenefits.com, and let us help you get your company on the road to wellness!

Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.

August 28, 2009

Hill, Chesson & Woody strives to keep our clients' group decision makers abreast of trends influencing the employee benefits market. Look for Eyes on Benefits to bring you news and information affecting you and your employees.

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www.hcwbenefits.com