ShareThisWith employer-sponsored health plans, is the carrot or stick more effective?
Some companies offer incentives -- gas cards, cash, discount rates -- to get employees to live more healthfully and curb costs. But, increasingly, firms are punishing employees financially if they don't take their own health more seriously.
The National Business Group on Health surveyed large employers and found 80 percent plan to offer financial rewards to employees who participate in certain health initiatives this year, up from 54 percent in 2011.
Its survey shows the share of companies "penalizing workers over health measures or lack of participation in wellness plans" is expected to double this year, to 38 percent, the survey shows. Most penalties involve a higher insurance premium. In other cases, employers are refusing to hire nicotine users as a way to create a healthier workplace.
Other surveys confirm this trend: Mercer, a national benefits consulting firm, found 24 percent of the largest companies -- those with 20,000 or more employees -- will charge higher health insurance premiums for smokers. And 12 percent of firms with more than 500 employees are doing the same, according to the 2011 survey.
Private-sector insurers and employers largely are driving the punitive movement: Home Depot, PepsiCo, Safeway and others are asking for higher premiums from workers who smoke.
Wal-Mart, the country's largest private employer, charges about $2,000 more a year in premiums for smokers who enroll in the company's most generous health plans.
How big does a penalty or incentive have to be to influences employee behavior? Would employees be more likely to lose weight if they got a guaranteed payment -- say, a $150 gas card -- or if they were entered into a lottery to win a much larger sum? Will a simple written reminder get more people to sign up for a flu shot?
The University of Pennsylvania's Center for Health Incentives and Behavioral Economics is studying those issues.
One center study showed that General Electric Corp. employees given $750 in incentives were 3.28 times as likely to quit smoking than those who were merely encouraged.
"This is where the story gets interesting," said Harald Schmidt, research associate at the center.
When GE tried to install that incentive platform -- $750, in three stages, for those who quit -- across its 152,000-person U.S. workforce, some nonsmoking employees pushed back. Their argument: Why should smokers be eligible for cash or premium discounts when nonsmokers get bupkis?
So GE re-engineered the plan, making it punitive. Those who smoked got a $650 penalty.
But there was no empirical evidence that such a program would work, Schmidt said.
Finding out what works is paramount, especially as the federal government gives employers more latitude to tinker with premiums for those who quit smoking, lose weight or otherwise try to improve their health.
With "participatory" programs, in which someone might get $50 for completing a body-mass-index exam, there's no limit on how much cash a company may dole out.
But for "outcomes" programs -- which reward or punish only if you lose the weight or reduce cholesterol or quit smoking -- the amount is capped at 20 percent of the total premium.
The new federal health care reform bill raises that limit to 30 percent and, in some cases, to as much as 50 percent, starting in 2014. For a family with a $12,000 health plan, $3,600 of that total could be tied up in outcomes-based discounts.
Critics call punitive measures a slippery slope: Testing for nicotine use today could lead to alcohol testing tomorrow. Employers could refuse to hire people if they don't like their diet or their family's history of heart disease.
As of February, Geisinger Health System in central Pennsylvania will test job applicants for nicotine. Those who fail won't get hired, though they can reapply in six months -- after quitting smoking.
"Non-nicotine hiring policies are legal in 20 states, including Pennsylvania," said Richard Merkle, Geisinger's chief human resources officer.
Schmidt said such programs could be viewed as biased: Poor people generally have a tougher time quitting smoking and have higher smoking rates to begin with, meaning premiums are being raised on the class of people who can least afford it.
"The problem with this is that we don't all start from a level playing field" in terms of personal health and socioeconomic background, Schmidt said. "You help people more by employing effective, evidence-based incentive programs," not refusing to hire them outright.
Schmidt said some of his research shows that people who are healthier to begin with are more likely to get involved in "participatory" programs.
(Contact Bill Toland at btoland(at)post-gazette.com.)
(Distributed by Scripps Howard News Service, http://www.scrippsnews.com)
