Monday, December 21, 2009
Freedom or Health
Recently a local company implemented a $11.56 a week or $600.00 a year charge for all of their smoking employees. Seems to cross a line that we may all be facing as America becomes more and more a social country. What's next $15.00 a week if you are over weight? How about $20 a week if you enjoy cocktails after work or on weekends? Maybe $20 a week if you use a tanning bed? Where does this kind of payroll deduction end? Is it legal? If you have any thoughts I'd love to hear them. This charge is affecting the paycheck of someone I care very much about, who works hard for his money and must agree to pay the fee, stop smoking and or enroll in a stop smoking program. Who has the right to demand how we choose to live our lives. Everyone knows the risks of smoking. Do I wish they all would quit? Yes. Do I think they should be charged through their workplace because they choose to smoke? No.
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I work for a major employee benefits company. Most larger employers' medical benefits are "self-funded," which means that the employer pays the insurance carrier an administrative fee to process claims and answer the phones, but the money that is paid to doctors and hospitals in medical claims actually comes out of the employer's pocket. In other words, the employer is assuming the actual financial risk of the rather than the insurance company.
ReplyDeleteSince the employer is on the hook for the medical expenses, it's to their advantage to find ways to reduce the growth of medical costs, without reducing or eliminating benefits all together. So, employers are increasingly looking to drive behavior change to get employees to make smart decisions with regard to their health. There are two approaches that are being taken with regard to this, they can be looked at as a carrot/stick approach. The "carrot" approach is to offer incentives to employees who adopt healthy habits - for example, if you get an annual physical and recommended preventive screenings such as a cholesterol test, pap smear, mammogram, etc., the employer might give you a discount on your contribution toward health coverage, or a sum of money directly into your paycheck. At the same time, the "stick" approach is to provide a DISincentive to those individuals who fail to adopt appropriate behaviors.
Beyond the obvious benefits to the EMPLOYEE for improving his or her own health. there are several advantages to the employer for having healthier employees. First off, reduction in medical costs goes directly to the employer's bottom line. This enables them to remain competitive and avoid benefit reductions and/or job cuts. Second, it has been demonstrated that healthier employees have lower lost time at work, and are also more productive while they are at work.
So, encouraging employees to adopt healthy habits is a win-win for both the employer and the employee. However, many of us (myself included) have a hard time changing behaviors that we've had for a long time, whether it's smoking, eating junk food, or not exercising. We're more likely to do something if there's a financial impact, and employers are seizing on this.
Since the health risks of smoking are well-known, it is almost a foregone conclusion that the health care costs for smokers will be significantly higher than for non-smokers. So, since the smoking employees will be driving a larger portion of the health care costs, companies are requiring them to either quit smoking (and providing the resources to help them do so, such as access to company-paid stop-smoking programs) or bear a greater share of financial responsibility for the costs that they will inevitably incur under the company's medical plan.
Is it right? Maybe, maybe not. Is it legal? Yes. Furthermore, it's becoming a significant trend among employersn nationwide, and we will likely only see more of this sort of thing as health care costs continue to rise and consume ever larger portions of company's revenue.
I know this has been a very lengthy comment, but I wanted to provide some background as to why this sort of thing is occurring.