BlueCross BlueShield of Tennessee employee Daniel Lau, left, works out during his lunch break Monday morning at the in campus gym, which is part of the health incentive program at the insurer. Lau walks for an hour on the treadmill four to five times a week.
AT A GLANCEHere's a snapshot of wellness programs offered by some Chattanooga-area companies:Memorial Health Care System• Employees: 4,500• Workplace wellness: Employees can save $200 on health insurance annually by completing health screenings and assessments. Also offers health management programs, a personal wellness program and onsite exercise classes.Erlanger Health System• Employees: 4,700• Workplace wellness: Offers biometric screening and health assessments and provides free access to a fitness center if employees do screenings. Also provides free wellness and educational programs and free low-acute care.Volkswagen• Employees: 2,200• Workplace wellness: Pays employees $100 into a Health Savings Account if they complete a biometric screening.Chattanooga Publishing Company• Employees: 318• Workplace wellness: Uses quarterly wellness initiatives for participation in contests that include cash and other prizes. Pays employees to exercise 30 minutes a day if they participate in the wellness program. Charges tobacco users an additional health insurance premium.BlueCross BlueShield of Tennessee• Employees: 5,000• Workplace wellness: Charges employees $25 a pay period if they are enrolled in medical coverage insurance but do not complete a biometric screening and health assessment. Pays for participation in the wellness incentive program, with payouts to 4,092 employees in the third quarter of 2011.State of Georgia• Employees: 700,000• Workplace wellness: A Wellness Option provides a 6 percent lower premium, has slightly richer benefits and asks employees to fulfill the Wellness Promise, which includes a biometric screening and health assessment. About half of employees chose the lower premium plan this year.Tennessee Valley Authority• Employees: 13,000• Workplace wellness: Employees can earn points by doing a biometric screening and working toward goals based on those screenings. They can earn up to $200 a year based on those points.WHAT THEY'RE SAYINGAbout wellness programs at work."I think it's mostly a good thing, but it depends on your workforce and what they need. Any program should be designed to the needs of your employees."- Bill Ramsey, 58"Our program has been a positive thing. It encourages people who are trying to live healthy lives."- Rusty Hardison, 45, TVA employee"Everybody needs to be healthy, so I think it's a good thing, as long as it helps families. I was a single mom for many years and couldn't do a lot of programs because they didn't offer child care. Too many programs just help management. They need to help the lower people, the office workers first. If they do that, it's a good thing."- Katrina Cline, 33, unemployed but has worked in various medical offices"We live in a shared society and people need to take a shared responsibility by being responsible for their health. Because it costs all of us and it costs companies if you aren't productive. You can eat what you want, but there are consequences for your actions. I shouldn't have to pay for your heart transplant because you eat bacon."- Raphael Smith, 42"As Americans we don't like to be told what to do - we are an individualistic society - which I think is why people don't like it. I think it's unfortunate that your company has to force you to be healthy, but people need to take responsibility for their health."- Shushannah Smith, 35"I'm a big fan of preventive health measures, but I think a company should only offer incentives, not penalties. You shouldn't be able to charge someone if they don't do what you tell them to do. You have a life and you have a job. They should be separate."- Inga Johannesen, 46
Not motivated to lose 15 pounds this year or run two miles today? It may cost you greenbacks.
To stem rising health insurance premiums and improve their bottom lines, more and more companies are reaching for financial incentives -- money in health savings accounts, gym memberships and even higher premiums -- hoping it will motivate their workers to lose weight and lower their blood pressure. Healthier employees use fewer sick days and take less time off, resulting in greater productivity.
Many company wellness programs began with the carrots -- money, rewards and gift cards.
But in the last few years, the stick has become increasingly popular, with higher employee premiums and money taken out of paychecks if workers do not have their cholesterol checked or reach targeted health goals.
The use of penalties doubled from 2009 to 2011 and is expected to double again this year, according to a recent nationwide survey of hundreds of companies.
Workers in the Chattanooga region are subject to a variety of penalties and incentives from their companies:
• BlueCross BlueShield of Tennessee charges employees $25 per pay period --about $600 a year -- if they do not participate in the company's workplace wellness program.
• Georgia state employees have a "workplace wellness" premium that allows employees to pay a lower health insurance premium if they participate in the wellness program, about 6 percent less than they would pay for a standard premium.
• The Tennessee Valley Authority gives employees the opportunity to reach certain health metrics, such as desirable body mass index or correct cholesterol levels, paying employees up to $200 a year if they reach all the targets or take steps to improve their health.
"We are now moving down that path from the old wellness programs which were water bottles and T-shirts to a results-based plan, with significant differentials in premium for those who participate versus those who don't," said Russ Blakely, a Chattanooga benefits consultant. "The incentives are going to be harder to earn in the future."
Critics say, while many programs sound good and may be beneficial to employees, there are dangers and concerns with the implementation of the plans.
Federal guidelines limit what type of penalties companies can use based on an employee's health. But the shift opens the door to privacy concerns about providing your employer with medical information, discrimination toward unhealthy employees and the danger that those most needing health insurance will be the ones least likely to afford the higher costs if they are unable to meet health goals.
The programs could also drive more people from employee plans and into the new health insurance exchanges being implemented under health care reform.
More than a third -- 38 percent -- of the surveyed companies said they plan to have penalties in place by the end of this year, according to an October study by Towers Watson, a professional services company, and the National Business Group on Health. About 16 percent of those penalties will be tied to results-based measures.
Under federal law, companies can charge up to a 20 percent difference in premiums for results-based programs. In 2014 that will go up to 30 percent, and there are guidelines that will allow it to go up to as much as 50 percent. If the program is not results-based, there is no limit to how much employees can be charged.
So far, little research has been done to see which types of programs are most effective. Additionally, some health issues, such as diabetes or cholesterol, can result from a combination of genetics and lifestyle choices.
Will these new programs cost individuals based on their genes or their parents?
For employees in a bad economy, poor job market and few choices, there is little they can do about the penalties if they want to keep their employer health insurance.
"If not done well, there are real concerns," said JoAnn Volk, research professor at the Health Policy Institute at Georgetown University. "For people who need health care, but who fall on the wrong side of the line, it can be pretty serious. But most people look at it as the cost of getting benefits. They just sort of suck it up."
FEDERAL GUIDELINES
Employers have been dealing with rising health care costs for decades -- premiums for coverage under employer-sponsored health plans have risen by 113 percent in the last 10 years. The rapid rise has somewhat stabilized in the last two years, but costs are still going up at twice the rate of inflation.
Some of those costs have been passed on to employees, but companies have also tried to find ways to lower their part of the premiums.
Eight to 10 years ago, many companies started charging different premiums for smokers. A few years later, companies began rolling out employee wellness programs. Company gyms, fitness programs and incentives to stay in shape became the norm, especially for large companies, but using them was voluntary.
Health care costs continued to rise.
Now, poor health may cost you -- money, information, time.
There are rules -- programs that offer an incentive or penalty have to promote health and give employees a reasonable alternative to reaching set goals, such as walking, if they can show they are medically not able to reach those goals.
"The program has to generally promote health and not be a subterfuge for discrimination, but those things aren't clearly defined," Volk said.
A group plan cannot require an employee to pass a physical exam, but it can require workers to fill out a health care questionnaire.
Some employers use a biometric screening, which usually includes body mass index testing, cholesterol screening and other measures of health.
"Currently the financial incentives are nowhere near what the law allows," Volk said. "But this notion of targeting outcomes rather than just participation is small but growing."
The Equal Employment Opportunity Commission does not have a specific policy regarding workplace wellness programs, but it has issued several guidelines, EEOC legal expert Kerry Leibig said.
Under the Americans with Disabilities Act, employers cannot ask medical questions unless they are work-related, and any participation in a wellness program has to be voluntary. The EEOC has issued guidelines stating that if a company implements penalties, its program is no longer voluntary, Leibig said.
"It has to be voluntary. You can't penalize refusal," Leibig said.
But the EEOC is not a legal authority and does not make laws, she noted. Instead, it looks at complaints filed by employees and then issues decisions based on those complaints. In a few years, as the process works its way through legal challenges and complaints, there may be more guidelines on wellness programs, she said.
LOCAL COMPANIES
Numerous Chattanooga companies have implemented some version of wellness programs. Some offer rewards; some offer penalties.
Memorial Health Care System, Volkswagen, the Tennessee Valley Authority and the Chattanooga Publishing Co. -- which prints the Chattanooga Times Free Press -- have a rewards system, with some employees earning money or other rewards based on participation in wellness programs.
Georgia offered a Wellness Option premium this year to its 700,000 employees and dependents. The plan offers a 6 percent lower premium and has slightly better benefits. To participate, employees must undergo a biometric screening and complete an online health assessment.
BlueCross charges money if workers don't participate in its programs. Some other companies require biometric screening to be eligible for insurance.
Harald Schmidt, a research associate at the Center for Health Incentives and Behavioral Economics at the University of Pennsylvania who has studied workplace wellness for several years, said the question of rewards or penalties can be a smokescreen.
"It is a bit of a blurry line," he said. "It is a lot about perception and about the justification for what you are doing."
Tyler Sanderson, director of total rewards at BlueCross BlueShield of Tennessee, said his company only has to look at the results to show that penalties work.
Last year, the company offered a $7 per-pay-period incentive for employees to participate in biometric screenings, but only 67 percent of about 5,000 employees took the screening.
This year, the company began charging $25 a pay period if employees did not participate. Now 93 percent of its employees have taken the biometric screening.
"It's been very effective," Sanderson said. "But you are not required to take the screening. I have friends who choose not to participate. It is their choice."
Sanderson called BlueCross's wellness program "very comprehensive."
A cafeteria provides healthy food, where salads cost less than burgers and snack machines have healthy, less-expensive options.
A full-scale fitness center includes trainers, various classes and numerous programs to encourage participation. Employees can wear pedometers that automatically track steps and download to computers to monitor progress.
Their recently built campus on Cameron Hill in Chattanooga includes a pharmacy where employees can pick up prescriptions or Tylenol, and a nurse practitioner is on staff during normal business hours.
Even the building is laid out to encourage walking and has a walking track in the basement. An outside walking track stays busy on sunny spring days.
In addition to the penalties, the company also offers monetary awards for exercising and achieving goals.
Sanderson said he hears testimonials from employees who have lost weight, improved their BMI and lowered their cholesterol.
He said he has lost 30 pounds since joining the company nearly two years ago.
"I see it as helping people. We energize people to get active and improve their health," he said. "It's not mandatory."
POTENTIAL ISSUES
Privacy HIPAA guidelines, anti-discrimination laws and the Americans with Disabilities Act create a network of laws that may all help to address problems with workplace wellness programs.
In addition, several states have passed legislation to govern the implementation of wellness programs, but Tennessee and Georgia have not.
However, most of those laws were not designed with such programs in mind.
A recent study by Volk and Sabrina Corlette, both at Georgetown University, recommends that state and federal standards need to be established to guard against programs that inappropriately punish employees who have poor health, are coercive or create poor health outcomes.
The programs should pay for counseling and disease management, allow reasonable time for employees to meet their goals and support better behaviors rather than simply targeting biometric outcomes, they say.
Volk said workplace wellness programs are not necessarily a bad thing -- employees spend a good deal of their waking hours at work.
The programs are also great for companies. Studies show that, two years after implementation, companies save from $3 to $6 for every dollar they spend on wellness programs.
Insurers also reduce premiums to companies involved in wellness programs. BlueCross, for example, gives up to 4 percent off their premiums, Blakely said.
But there is little evidence the use of financial incentives changes employees' behaviors. And because of the recent implementation of the plans, no long-term studies have been done.
Volk and Schmidt urge companies to provide research analysts with comprehensive data so companies can start looking at best practices rather than simply implementing plans that may or may not be effective.
To be truly effective, a plan needs to look at several factors -- better health, cost savings and participation, Schmidt said.
"We need to look at whether the programs are actually making people healthier and not just improving the bottom line," he said.
Anton Gunn, this area's regional director for the U.S. Department of Health and Human Services, said the agency supports programs that are evidence-based and shown to improve employees' health.
Gunn said he has not heard concerns voiced about possible discrimination as a result of the incentives.
"We have a very robust civil rights department that serves to enforce the law; anyone who has a problem can easily call that department and file a complaint," Gunn said.
A QUESTION OF FAIRNESS
Employers say what they are doing is beneficial to their employees. Everyone is better off when employees are healthier.
And it is only fair that employees should pay for poor life choices that lead to higher health costs, said Matt Salada, human resources director for the Chattanooga Publishing Co.
"At some point, individuals have to be accountable for their own choices. That is one of the tough realities of life," Salada wrote in an email. "In our present health care system, employees who make wise diet and exercise choices subsidize the poor diet and exercise choices made by their co-workers because as group health insurance plan participants, they are all charged the same basic premium regardless of their dietary and exercise choices.
"Understandably, many employees believe that is not fair. And many argue that such a system, which in large measure discourages personal accountability, breeds the type of poor exercise and dietary choices that have led, at least in part, to skyrocketing health care costs nationwide."
But Schmidt said what is fair and just is not black and white.
A single mother who is working two jobs and caring for her parents may not have time to go to the gym.
Poorer people are often less healthy and may live in a food desert.
For some families, the possibility of $2,000 to $3,000 in increased premiums as a result of a wellness program may mean they choose to buy groceries or pay the rent rather than buy health insurance.
Volk said her greatest concern is how wellness programs will affect vulnerable employees.
In their study, Volk and Corlette note that people with conditions like cancer, diabetes and heart disease are much less likely to treat and manage their condition when their insurance costs are high.
Others, such as low-income employees, women and minorities, also fall into groups that may be least likely to achieve the targets.
Genetics plays a role in body mass index, something that some people may not have control over.
"You say people have to have a fair chance to use the rewards, but the programs can be unfair in ways that are not always evident," Schmidt said. "Oftentimes people who are most likely to be disadvantaged in these programs may not have a stronger and powerful lobby behind them. They are people who are seen as easy targets -- the obese and smokers."
FUTURE OUTLOOK
Workplace wellness programs are still in their infancy.
Where they will be in 10 years or even two is anyone's guess.
Erlanger Health System is one local employer that has implemented few monetary rewards and no penalties. The hospital, with about 4,700 employees, offers health risk assessments, biometric screenings and weight loss programs.
Gregg Gentry, Erlanger's chief administrative officer, said the hospital reassesses its program every year. Gentry has talked to other companies using penalties and has looked at options.
"I think employers have to think through their culture and what would work best for them," he said. "We think it is right that companies are more serious about their health plans, but companies and employees have to find the right balance."
Volk and Schmidt would like to see more studies and research, more emphasis on outcomes and better tracking of programs being implemented. Employees should have input on how the programs work and provide feedback.
"There is a clear indication that programs are becoming more and more common," Schmidt said. "Ideally, we would at least expect not just cost savings and not just improved productivity but also health improvement."