Can You Fine Obese Employees? Smokers?

Clarian Health of Indianapolis, Indiana, has announced that it will begin to charge employees who smoke, are obese, or fail to control high blood pressure or cholesterol. Management believes that a $5 per-paycheck fine will motivate people to change. But according to expert Lisa Ballentine, wellness rewards do a better job.

Most companies sponsor wellness initiatives with the goal of reducing ever-increasing costs of healthcare coverage. Clearly, that works, and such savings are surely Clarian Health's goal in doling out penalties. But there's much more at stake, attorney Ballentine said in an interview with BLR^R editors.

Employees who exercise regularly bring good attitudes to work with them, because working out gets their endorphins flowing, Ballentine said. And, because they have more energy, they are more productive than their less-active colleagues.

More to Fitness than Saving Healthcare Costs

It's clear that lack of exercise, smoking, and excess weight cause or exacerbate serious health risks. Some 23 percent of U.S. adults smoke, while 65 percent are either overweight or obese. So why not just refuse to hire smokers and obese people?

No Smokers Allowed

Employers in Michigan, Nebraska, Washington, and a few other states can legally reject smokers. But in more than 30 states, Ballentine warned, it's illegal to discriminate against candidates who engage in legal activities outside of work.

So as long as smoking, alcohol, and overeating are legal, employers can't consider these habits in hiring. Furthermore, she cautions, obesity can sometimes be classified as a disability under the Americans with Disabilities Act - especially if a spurned applicant can show in court that the employer regarded him or her as disabled based on appearance.

Take a Positive Approach

"Invest in your people," Ballentine said. Take a positive rather than a punitive approach to wellness. A cornerstone of her strategy is to educate employees about the benefits of staying healthy and the risks of failing to do so. "Foster a culture that values and rewards health progress," she advised.

For example, she suggested:

• Bring in health experts to offer 'lunch and learn' sessions about various aspects of wellness.
• Create company walking programs.
• Invite a weight-loss provider to sign your employees up for meetings on your premises.
• Sponsor employees for a stop-smoking program and reward them if they succeed.
• Conduct a health fair.
• Offer stress-reduction classes or information.

Positive Spirit Infectious

When wellness programs catch on with a few employees, Ballentine said, "You'd be amazed how contagious the spirit can become," with more and more people joining the effort to exercise, lose weight, or quit smoking.

Ballentine suggested affordable incentives that are easy to find and have a wide appeal to employees. For example:

• Cater a luncheon for program participants.
• Give movie tickets.
• Give free DVD rentals.
• Offer a paid day off.
• Give a small gift certificate from a local merchant.

How Much Can You Reward Participants for Succeeding?

Don't just pay for employee participation in stop-smoking courses, but also reward employees if they succeed in quitting, Ballentine suggested. Of course, while it is possible to do that, HIPAA (Health Insurance Portability and Accountability Act) privacy regulations make it a bit tricky. The following are some compliance tips for wellness programs.

Participation Only Rewards

Employee rewards based on participation only, rather than achievements or outcomes, are generally acceptable.

However, alternative means of participation must be devised and offered to employees who cannot, because of a medical condition, participate in the expected way. Examples might be someone in a wheelchair or someone with lung disease who must carry supplemental oxygen, either of whom might be unable to participate in an exercise program.

Achievement Rewards

If employers want to offer rewards based on achievement rather than on participation (e.g., actually quitting smoking as opposed to just participating in the program), their programs must meet five requirements:

1. The total individual reward cannot exceed 20 percent of the total cost of employee-only healthcare coverage.

2. The programs that give rewards must be reasonably designed to promote health or prevent disease.

3. Participants in a program must be given the chance to earn the reward at least annually.

4. Programs must be available to all employees, so reward programs must give any employee for whom achieving the basic standard would be unreasonably difficult or medically inadvisable the chance to earn the reward in another way.

5. All communications material about the programs must state clearly that reasonable alternatives to the basic standard are available or that the standard can be waived if necessary.

In tomorrow's Advisor, we'll look at more tips for dealing with legal but unhealthy behaviors, and we'll take a look at a trusted program for developing a wellness program with a great ROI.