There is no question that corporate wellness programs are increasing in popularity. From requiring medical checkups to smoking cessation and weight loss, many health plan sponsors are implementing wellness programs in an effort to improve employee health and decrease overall health care claims experience. The new health care reform laws include provisions that encourage small employers to implement these programs, and even provide some measure of subsidy. But employers must be careful about looking at a "one size fits all" program as a solution.
The most common question is to employee a carrot or a stick. The IRS certainly recognizes that there can be up to a 20% penalty (which will increase to 30% under the new reform laws) for non-compliance. But at the same time, HIPAA requires that plan participants have to be offered reasonable alternatives to meeting certain health goals depending on their own limitations. Further, there are individual state laws addressing discrimination that have to be a concern.
I spoke at a seminar last week where one of the other presenters opined that a wellness program was just a gateway for an employment discrimination suit. For example, Scotts Miracle-Gro implemented a no-smoking program and fired an employee who tested positive for nicotine. He sued over the off-site smoking ban and they settled for an undisclosed figure. So a termination "stick" might not be the best approach. But charging higher premiums creates problems as well, particularly if an individual claims that a particular disability prevents them from complying with the wellness program, thereby discriminating against them. Would charging higher premiums to those who don't quit smoking give rise to a claim for disability discrimination if it is successfully argued that nicotine addiction is a disability? Would requiring decrease in body mass index improperly discriminate against employees with weight issues?
In a recent survey conducted by MetLife, 58% of respondents said they participated in wellness programs because of reduced costs, while only 30% said they participated because of fear of penalty. Unfortunately, there is little case law defining the limits of mandated participation in wellness programs. It is pretty clear that communication and education about the program is key, but design and implementation remains a minefield.
I believe that, in the end, an good wellness program is only as effective as the population that it serves. So start by evaluating your population. Are they carrot or stick driven? How likely are they to comply? What "wellness" issue are most important to them and which ones most heavily impact your plan? It is better to start with a limited program based on known data then to assume you can put any program in place and make it work. Knowing your options is the best way to avoid a wellness program that makes your company "sick."
