Happen to like eating what you want, when you want and how ever much you want? Happen to like sitting on the couch after a long day at work? How about going out for drinks with your friends on the weekend? Too bad.
In a society that heavily advocates free choice, it seems that our choices are being limited by decisions made beyond our control everyday.
As an attempt to reduce the escalating costs of providing health care coverage, more employers are seeking to influence workers’ lifestyle choices.
Let’s just say, because you’re not watching your waistline, management will do it for you, so it doesn’t affect their bottom line. Don’t like it? Find a new job.
Many companies already offer wellness and reward-based programs with the purpose of inhibiting rising health care costs. Incentive programs with a potential gain, like money or better health, have low enrollment and have produced poor results.
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Along with a person’s behavior, there exists neural evidence to support that the brain responds more to a loss than to a potential gain. The implications for structuring incentives to influence people’s actions are apparent.
Employers are beginning to recognize this behavior and adapt their policies to penalize workers for poor lifestyle choices, instead of rewarding them for making the right, or healthier, decisions.
The line between whether companies are doing it for the betterment of workers or profitability is blurred.
For example, Honeywell International Inc. introduced a $1,000 penalty deducted from a worker’s health-savings account for those who opt for certain procedures, such as knee and hip replacement and back surgery, without getting further advice. The company initially offered $500 for participation in a program that provided such advice, but saw enrollment at less than 20 percent. After switching the incentive to a penalty, enrollment shot to more than 90 percent
This plan, according to Honeywell’s vice president of compensation and benefits, will save the firm $3 million annually.
In another example, CVS Pharmacy recently issued a new policy that workers must submit health metrics like blood pressure, glucose, body mass index and weight by May 1, 2014, or pay a $600 fine to use the company’s health insurance program.
According to CVS, penalties are now considered best practice in designing incentive structures for wellness programs.
Unfortunately, according to a friend who works there, the common consensus among her colleagues is that behavior won’t change but spending will because of the additional costs the company isn’t picking up and the penalties for not meeting the four health qualifications.
Let’s call it what it is. Companies don’t care about you. They care about costs. But will this help curb the population’s unhealthy habits?
Around 20 percent of a company’s workforce accounts for 80 percent of health care costs, and around 70 percent of health care costs are tied to chronic conditions resulting from lifestyle choices like overeating and sedentary behavior.
Even though companies cannot discriminate against obese workers, many of the health metrics measured, such as high blood pressure and high cholesterol, lead to those conditions that significantly impact health care costs.
A Milken Institute study found productivity loss from seven of the most chronic conditions have been tied to controllable risk factors that could be addressed by prevention programs. The total economic loss is $1.3 trillion annually, with $277 billion spent on treatment.
So, the evidence supporting cost reduction is ample. The current means are insufficient to recoup this lost productivity.
Taking a move from the government’s playbook, companies are utilizing a penalty, instead of a tax, to influence behavior of their workers.
With the Affordable Care Act, the Supreme Court found that the government has a legal basis to tax an individual for certain behaviors, like not purchasing health insurance, but it cannot impose a penalty for such behaviors.
However, the law is different for employers; if the penalty or reward doesn’t exceed 20 percent of the cost of an employee’s health coverage, then companies are free to do what they want.
The question of legal discrimination arises when certain health metrics are linked to underlying conditions. But are those underlying conditions a result of poor lifestyle choices? Who determines which came first? The law doesn’t have an answer for this question.
Employers have discovered a way to demand workers to meet certain requirements. At the same time, we are entering uncharted waters of legality. These actions are unprecedented. It begs the question of what other penalties employers can introduce to reduce costs.
The proliferation of these health care-related penalties are facing increasing scrutiny for their coercive nature. Perhaps this ethical dilemma could finally break the proverbial glass ceiling on the country’s obesity problem and encourage people to make smarter, healthier lifestyle choices. The snow has begun to fall, pretty soon it will be an avalanche.
Tommy is a senior in Business. He can be reached at [email protected]. Follow him on Twitter @tommyheiser.