Companies have accelerated their plans to use financial incentives and penalties to hold employees accountable for their health, according to a study by Hewitt Associates, a human resources consulting and outsourcing firm.
The study, which surveyed nearly 600 large U.S. employers representing more than 10 million employees, shows that nearly half of companies "use or plan to use financial penalties over the next three to five years for workers who do not participate in certain health improvement programs," according to an analysis written by Stephen Miller, an online editor for the Society for Human Resource Management.
"That trend might be accelerated by the 2010 health care reform law, which will give employers more leeway in incentivizing healthy behavior," Mr. Miller wrote.
Lawrence Trabucco, who is with Chattanooga-based human resources consulting firm ClearOptions, said employer recommended or mandated participation in health programs is on the rise.
"While this has been important for 20 years, only more recently in the last few years have we seen so much sincere interest in addressing these employee work force issues, focusing on high-risk employees," he said.
Hewitt's survey revealed that of employers who use or plan to use penalties, 81 percent expect to charge higher premiums and 17 percent will increase deductibles for employees who don't toe the line.
Other penalties listed by employers include a smoker surcharge, required participation in a disease management or lifestyle behavior program, mandatory improvements on biometric screenings and required visits to a health coach, the survey said.
Gretchen Burgess, also a ClearOptions senior consultant, said these penalties simply level the playing field for employees whose choices lead to higher health expenses.
"In reality, you're penalizing the unhealthy lifestyle choices that are translating into more healthcare costs," she said. "Is it fair to charge someone who makes healthy lifestyle choices the same as someone who doesn't?"
Employers appear to agree that a combined carrot and stick approach to controlling health care costs is the best option, with 95 percent listing the cost of health care as a top business issue, according to the survey.
Percentage of surveyed employers who currently or plan to impose penalties on employees:* Smoker surcharge -- 64 percent* Require participation with disease management/lifestyle behavior programs or pay a penalty -- 50 percent* Require biometric screening or pay a penalty -- 45 percent* Require participation with a health coach or pay a penalty -- 25 percent* Require biometric improvements (like lower blood pressure)or pay a penalty -- 17 percentPercentage of surveyed employers who plan to offer cash incentives to employees in 2010* Health risk questionnaire -- 63 percent* Health improvement/wellness programs -- 37 percent* Disease management programs -- 17 percentSource: Hewitt Associates
"Businesses are being more choosey in who they hire," Ms. Burgess said. "Employers are looking at people and wondering if they're going to affect health care costs."
Andy Figlestahler, partner with Cleveland, Tenn.-based insurance firm Ed Jacobs & Associates, packages a free wellness program with the company's group insurance plan to help employers cut expenses. While Mr. Figlestahler doesn't support mandatory participation in wellness programs, he wants employees to understand that it's a win-win situation for them.
"As a kid, when mom told you to clean your room, nobody wants to clean their room, but when you have a clean room you can find your toys better," he said. "If they can live a healthier lifestyle and come off their diabetes or cholesterol medication, they're going to live a better life."
The president of locally based Picture Wellness, Maurice Saliba, leads a company workout program targeted at high-risk employees for several area businesses.
"We know that heath insurance premiums are based on usage: the more people use it, the higher the rates, so if we can minimize medication usage because people are getting healthy, we can reduce rates," he said. "You can go back to your broker and say, 'we started a wellness program, and we've lost this much weight, and reduced our medication use by this much, we want a better rate.'"