Libertarians make the argument that the government is a threat to liberty because it employs “men with guns” who can rob you of your life and freedom. Without getting into that tired debate, I would just like to make one observation: for most Americans, the greatest threat to their freedom comes from “men with pink slips” not men with guns, particularly now. (These men with pink slips, by the way, are exalted by “free market” worshipers of all philosophical bents.)
Like a lot of companies, Veridian Credit Union wants its employees to be healthier. In January, the Waterloo, Iowa-company rolled out a wellness program and voluntary screenings.
It also gave workers a mandate – quit smoking, curb obesity, or you’ll be paying higher healthcare costs in 2013. It doesn’t yet know by how much, but one thing’s for certain – the unhealthy will pay more.
The credit union, which has more than 500 employees, is not alone.
In recent years, a growing number of companies have been encouraging workers to voluntarily improve their health to control escalating insurance costs. And while workers mostly like to see an employer offer smoking cessation classes and weight loss programs, too few are signing up or showing signs of improvement.
So now more employers are trying a different strategy – they’re replacing the carrot with a stick and raising costs for workers who can’t seem to lower their cholesterol or tackle obesity. They’re also coming down hard on smokers. For example, discount store giant Wal-Mart says that starting in 2012 it will charge tobacco users higher premiums but also offer free smoking cessation programs.
Tobacco users consume about 25 percent more healthcare services than non-tobacco users, says Greg Rossiter, a spokesman for Wal-Mart, which insures more than 1 million people, including family members. “The decisions aren’t easy, but we need to balance costs and provide quality coverage.”
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The weak economy is contributing to the change. Employers face higher health care costs – in part – because they’re hiring fewer younger healthy workers and losing fewer more sickly senior employees.
The poor job market also means employers don’t have to be as generous with these benefits to compete. They now expect workers to contribute to the solution just as they would to a 401(k) retirement plan, says Jim Winkler, a managing principal at consulting firm Aon Hewitt’s health and benefits practice. “You’re going to face consequences based on whether you’ve achieved or not,” he says.
And those that don’t are more likely to be punished. An Aon Hewitt survey released in June found that almost half of employers expect by 2016 to have programs that penalize workers “for not achieving specific health outcomes” such as lowering their weight, up from 10 percent in 2011
The programs have until now met little resistance in the courts. The 1996 Health Insurance Portability and Accountability Act (HIPAA) prevents workers from being discriminated against on the basis of health if they’re in a group health insurance plan. But HIPAA also allows employers to offer wellness programs and to offer incentives of up to 20 percent of the cost for participation.
President Barack Obama’s big health care reform, the 2010 Patient Protection and Affordable Care Act, will enable employers beginning in 2014 to bump that difference in premiums to 30 percent and potentially up to 50 percent.
The article goes on to point out that some of these employee wellness programs have resulted in lower premiums as people became healthier. However, unless the program is very well designed and the people running them are persistent enough to change the culture, a lot of lower income people will just end up paying higher premiums and suffering from employer intrusion on a level not seen before.
I’m certainly not against people getting healthier or employers offering help for their employees and as a result lower their rates. Americans need all the help they can get. But this new “stick” approach smacks of private sector coercion I haven’t seen before. On one level it’s institutionalizing discrimination against people with illnesses (or potential illnesses due to being overweight)and on another it’s giving employers new incentives to get into the personal business of their employees — and eventually not hiring them altogether. The workplace always gets unfriendlier in hard economic times. These programs, however well intentioned, could easily end up changing the relationship of the employer to employee forever.