‘Wellness or else’ is a slippery slope

January 14, 2015

Should your company be allowed to punish you for health conditions beyond your control?

Yesterday Reuters Sharon Begley reported on U.S. companies increasing practice of using financial incentives, codified in the Affordable Care Act, to encourage employees to participate in wellness programs and achieve certain health goals. “The incentives, which big business lobbied for, can be either rewards or penalties – up to 30 percent of health insurance premiums, deductibles, and other costs, and even more if the programs target smoking,” Begley wrote. As this Reuters graphic shows, in 2014, two-thirds of companies used incentives to get employees to use wellness programs, and of those, 22 percent designed the incentives as penalties.

On paper, this makes some sense. While some health risks can be eased by modifying behavior and diet, some cannot. Exercise, for example, may not necessarily be the panacea for diabetes that many once believed. Then there are the other theoretically manageable factors, such as weight. Adult obesity rates in the U.S. have been growing at an alarming rate. According to data from the Center for Disease Control’s Behavioral Risk Factor Surveillance System, in 2013 Colorado had an adult obesity rate of 21.3 percent, the lowest in the country. More than 20 years earlier, in 1990, Mississippi’s obesity rate of 15 percent was the highest in the country. A November 2013 report from the McKinsey Global Institute found that “obesity is responsible for about 5 percent of all deaths a year worldwide, and its global economic impact amounts to roughly $2 trillion annually, or 2.8 percent of global GDP—nearly equivalent to the global impact of smoking or of armed violence, war, and terrorism.”

So far, so good; personal wellness and quality of life should be important to employees, and employers certainly want a healthy, productive workforce. But what seems like a good policy runs into trouble when on-paper incentives mistake genetics for behavior, and divining the difference between the two can run afoul of the law, as Begley’s article describes.

Consider this, for example: compared to the size of their country, American Samoans are famously over-represented in NFL and college football, owing in part to their size. (According to the CIA World Factbook, in 2007, 74.6 percent of the population fit the definition of obese.) This is great for those who hit the big bucks as professional athletes, but those without athletic gifts shouldn’t have to pay a premium for factors that may be beyond their control. A report from the National Institutes of Health stated that “BMI among 35–44 year old men and women increased by almost 18 percent from 1980–2010,” which is to say, much more slowly than the obesity rate reported by CDC for every U.S. state from 1990 to 2013.

The Department of Labor’s fact sheet on the issue says, “Programs must have a reasonable chance of improving health or preventing disease and not be overly burdensome for individuals.” And therein lies the rub: Enforcing similar standards for disparate populations can open an especially intrusive can of worms.

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