When Do Workplace Wellness Incentives Cease to be Voluntary?

This is a recent NPR clip about the current state of workplace wellness. It’s a pretty good summary of the current state of affairs so I wanted to post it. The transcript of the audio is below. 

Most medium to large employers offer some sort of wellness program for their workers. That can range from health screenings, to weight loss, and smoking cessation programs. Many employees like these options, and employers like that they can help hold down health insurance cost. But, there are legal questions about how far employers can go to encourage participation. NPR’s Yuki Noguchi has the story.  

Yuki Noguchi: Scott’s Miracle Grow makes products for the care and health of lawns. The Marysville, Ohio company says it wants to nurture its 8,000 employees the same way.

Jim King: It’s very much of a family culture here.

Yuki Noguchi: Jim King is a spokesman for the Scott’s company, which offers discounted prescriptions, annual health screenings, and some free medical care. In states where it’s legal, it refuses to hire people who smoke.

Jim King: We’ve been screening for tobacco use for about a decade. We no longer employ tobacco users.

Yuki Noguchi: That provision landed the company in court several years ago. A new hire failed a urine test for nicotine, lost his job offer, and sued the company arguing it was meddling in private affairs in order to drive down costs. He lost on appeal in 2012. About 80% of Scott’s employees submit to health screenings, and those who make unhealthy choices pay more for health insurance. King says Scott’s wellness policy attracted outside scrutiny, but employees embrace it.

Jim King: Once people understood what the program actually was, they recognized that it wasn’t anything like Big Brother at all. In fact, what we were doing was providing them tools.

Yuki Noguchi: Participation in the wellness program at Scott’s is not mandatory. In fact, under the law, such programs must be voluntary. But, regulators are now trying to define what voluntary means. Some hospitals require their workers get flu shots, which is controversial among those who can’t or don’t want to get vaccines. Beyond that, there are questions about money. For example, is a big financial penalty for non-participation too coercive? What about incentives for completing health screenings? Nico Pronk is Chief Science Officer at HealthPartners, a hospital system. He researches the effectiveness of wellness programs and says their design matters. He says incentives can work, but you have to be careful not to overdo it.

Nico Pronk: Once the incentives amounts go over a certain threshold, it may become a little bit more coercive.

Yuki Noguchi: Last year, the Equal Employment Opportunity Commission sued several companies, alleging their policies were too heavy handed. They argued those companies required health screenings or made non-participants bear the full cost of health insurance. Christopher Krysinksi is Associate Legal Counsel at the EEOC. He notes that, in a separate proceeding, the Commission is considering regulations to define what companies are allowed to do to encourage participation in wellness programs.

Christopher Krysinski: Limited incentives are permissible as long as the maximum incentive for participating doesn’t exceed 30% of the total cost of coverage.

Yuki Noguchi: Krysinski says employers must make sure that programs comply with many laws, including health and genetic information privacy, the Affordable Care Act, and the Americans with Disabilities Act. Employers can’t use a worker’s health against them.

Christopher Krysinski: There are opportunities for discrimination. This information that’s collected as part of a wellness program can’t crossover to anyone who deals with making employment decisions.

Yuki Noguchi: Business groups say they are striking a balance between encouraging participation and protecting the choice of their workers. Brian Marcotte is President and CEO of National Business Group on Health, a policy group representing large employers. He says most health care costs are lifestyle related and employers want to reduce costs. But, that’s not the only calculation companies are making.

Brian Marcotte:    At the end of the day, employers want healthy, productive, engaged, resilient employees in the most competitive workforce possible. And investments in health and well-being are part of that equation.

Yuki Noguchi: Nancy Hammer is Government Affair’s Counsel for the Society for Human Resource Management. She says employers want to draw in, not compel workers.

Nancy Hammer:   Health care and wellness is an employee benefit. So, you got to do something that is attractive to your employees.

Yuki Noguchi: No one benefits, she says, if no one uses the programs. Yuki Noguchi, NPR News, Washington.