Now, the Stick
Tuesday, November 13, 2007
Employers frustrated with mounting health-care costs for their workers have tried dangling a carrot to discourage bad habits such as smoking as well as behaviors that can lead to obesity, uncontrolled diabetes or high blood pressure. Now some employers are beginning to brandish a stick, docking pay, hiking insurance premiums or even banning employees from the workplace if they don't comply with off-site smoking bans.
So far Midwestern companies have taken the lead; only a few Washington area employers have followed. Starting in January, Tribune Co. will require its employees, including 1,200 at the Baltimore Sun, to pay $100 a month more in insurance premiums if they or any of their covered family members smoke.
But implementing such policies might be tough in the Washington area, said Jeff Munn, a health management staffer at Hewitt Associates, a human resources consulting practice in Falls Church, "because the job market is so tight." Plus, labor leaders say, the area's unionized employees, including many in the public sector, would have some protection from changes in benefits.
The Washington-Baltimore Newspaper Guild has filed a grievance over the Baltimore Sun smoking penalty. The case will likely go to arbitration, said Cet Parks, executive director of the Guild local.
But it's only a matter of time before other local programs penalize unhealthful behaviors, according to Lynn Argenbright, a health-care consultant with PSA Financial Center in Hunt Valley, Md. "More and more clients are considering it," she says.
A national survey of 450 major employers, released in April by Hewitt, found that two-thirds were moving toward more-aggressive wellness and disease management programs for employees. Almost half were offering employees incentives to participate in health initiatives, compared with just 38 percent a year ago. "The majority of the companies have been focusing on positive incentives, but the employers that have been starting mandatory programs are clearly getting a lot of attention," Munn said.
"You've got one-third of your life spent in the workplace," said attorney Garry Mathiason, whose San Francisco law firm, Littler Mendelson, recently released a report on employer-mandated wellness initiatives. "It's an incredible opportunity to take advantage of that time and look at the tie between wellness, absenteeism and medical costs. That's why the employer is so focused on this."
Rising health costs are providing impetus. Health insurance expenses are the fastest-growing cost of doing business, according to the nonprofit National Coalition on Health Care. Employers spend an additional $226 billion a year -- an average of $1,685 per employee -- on absenteeism, low productivity and other indirect costs of individual and family health problems, according to the nonprofit Partnership for Prevention.
Mathiason said his firm has been contacted by hundreds of employers that are adopting mandatory wellness measures, including "one very large employer" in the Washington area that Mathiason said he was not at liberty to name.
Smoking is perhaps the behavior targeted most often by employers. A handful of employers not only ban smoking on their property, they're also banning smokers from their workforce -- in states that permit such actions. (Thirty states, including Virginia, protect employees from being penalized for lawful activity, such as smoking, outside work. The District explicitly protects smokers from employment discrimination.)
In September, the Cleveland Clinic started mandatory nicotine testing for new hires. While it will not hire smokers, it does not fire current employees who smoke.
In 2005, the Okemos, Mich., office of Meritain Health, a provider of self-funded health plans, stopped employing smokers. Employees and their spouses undergo annual health assessments, including being tested for nicotine. Employees were given one year to quit smoking before the policy went into effect. Four who did not stop smoking lost their jobs. The company also announced it would dock $50 per paycheck from any employee whose spouse smoked and refused to take part in a smoking-cessation program. According to the company, all spouses affected have enrolled in such a program and no one has yet been docked.
This year, Scotts Miracle-Gro, the Ohio-based lawn and garden company that has six work sites in Maryland and Virginia, announced it would no longer employ smokers and would conduct random urine tests for nicotine. The announcement marked a change in tactics for Scotts, which has invested millions of dollars in an on-site fitness center at its headquarters and other employee wellness programs.
At least one worker, Scott Rodrigues of Buzzards Bay, Mass., has sued Scotts over the off-site smoking ban. Rodrigues began working for the company in 2006 but was let go after an initial urine test was positive for nicotine.
"There's almost no protection from intrusions of private corporations into your private life," said Harvey A. Schwartz, a Boston civil rights attorney who represents Rodrigues. "The argument we've made in this case is that what companies do to smokers could be done to people who are overweight or have high cholesterol, or ride motorcycles or sky-dive."
Scotts spokeswoman Su Lok would not comment on the suit or on how many employees have lost their jobs as a result of the no-smoking policy. "Our intent was to have a culture of wellness for our associates, but also to address the issue of rising medical costs," Lok said. She added that it was too early to assess the cost-effectiveness of the company's wellness program.
Other unhealthful behaviors also have come under scrutiny by employers.
Clarian Health, an Indianapolis-based hospital system, drew media attention this summer when it announced that by 2009, employees whose body-mass index (a fatness indicator measured by a person's weight relative to height) was too high could expect deductions from their paychecks. The company recently backpedaled and said that weight loss would be voluntary and that a worker's pay would not be influenced by his failure to drop pounds.
Scotts employees who are covered by the company's insurance must complete a health-risk assessment that looks at family history, lifestyle and health habits or forfeit $40 from their paychecks each month as a surcharge to their insurance premium. If the assessment shows an employee to be at high risk of medical problems, he also faces a monthly penalty of about $65 unless he works with a company-hired coach to improve his health.
"I would be the first to admit when Scotts introduced this, I thought, 'Are they being Big Brother, poking their noses into something they shouldn't?' " said Bonnie Hohlbein, vice president of finance, global technology and operations for Scotts. But Hohlbein submitted to the assessment, and what she learned led her to make changes.
"It was sort of shocking to see you're not in the normal [weight] range," she said. She now works out at the corporate fitness center and eats smaller portions. Today, two years later and 35 pounds lighter, she supports her employer's carrot-and-stick approach. "It depends on what motivates people, but having the money [penalty] and the nice facility right there helped get me started," she said.
A similar health-risk assessment, developed by Principal Financial Group of Des Moines, is being used by some companies in Iowa and Michigan. Workers at those firms must complete the exam, which records weight, blood sugar, blood pressure, cholesterol and tobacco use, to qualify for health insurance. Those with a poor score must work with a coach and improve -- or face higher deductibles and co-pays.
"We attempt to position this as more of an incentive-based program," said Jerry Ripperger, director of consumer health for Principal Financial. "But the people who elect not to participate in the wellness activities may have a different term to describe it."
Is it legal for your boss to look into your off-the-job behavior? Within limits, experts say. The Littler Mendelson study on employer-mandated wellness notes, "While it is questionable whether testing for nicotine (a lawful substance) will receive legal approval, employer-sponsored programs prohibiting smoking in the workplace and discouraging smoking in the workforce are already sanctioned."
Employers who want to use the stick need to navigate a legal minefield, including the federal Americans with Disabilities Act. Each jurisdiction also has its own set of labor laws: The District, for example, bans discrimination against employees for their physical appearance, which arguably could include obesity, according to Karla Grossenbacher, a D.C. labor lawyer with Seyfarth Shaw.
But experts generally prefer voluntary wellness initiatives to those that are coerced.
Karen Nussbam, executive director of Working America, the education and advocacy organization of the AFL-CIO aimed at people not affiliated with unions, said the group opposes mandatory wellness programs. "The money spent on those kinds of schemes would be far better spent on lobbying for universal health care or giving workers paid sick days; 50 percent of employees in the private sector don't have any paid sick days," she said.
Also unproven is whether the stick works any better than the carrot to change behavior.
"A lot of these approaches are making the assumption that all of these behaviors are completely in someone's control," said David Ballard, who heads up health and well-being in the workplace for the American Psychological Association. "But it can be exceedingly difficult to change those behaviors. A simple punishment isn't enough to make that kind of thing happen."
What may work better is a workplace environment that encourages wellness throughout the organization, said Ballard and many other wellness experts. Top management needs to model the desired change and offer employees such things as healthful food choices, attractive places to walk and exercise, and a culture that is supportive rather than stressful for employees.
"We've treated it only as a person's problem: blaming the victim because you're too fat, you don't exercise and you drink too much," said Dee Eddington, director of the University of Michigan's Health Management Research Center, who has studied workplace health costs for 30 years. "What our modeling shows is that we've got to start thinking holistically and have wellness as part of the overall mission -- health management as a serious business strategy." ¿
Beth Baker is a Washington area writer and the author of "Old Age in a New Age: The Promise of Transformative Nursing Homes." Comments:firstname.lastname@example.org.