You Manage It! 2: Ethics/Social Responsibility Should Employers Penalize Employees Who Do Not Adopt Healthy Habits?
In an effort to motivate workers to kick unhealthy habits, U.S. companies are hitting them where it hurts—their wallets. Employers who provide health insurance often use financial incentives such as contributions toward health insurance premiums to encourage workers to participate in wellness programs, such as smoking cessation or nutrition improvement courses. Now some companies are penalizing employees who are overweight, smoke, or have high cholesterol, for example, and do not participate in supplementary wellness programs. The penalty for not participating in a wellness programs is a higher health insurance premium for the employee, so that in extreme cases the employee’s insurance deductible could rise by $2,000 per year.
Although the motive behind company policies that pressure employees to adopt healthier lifestyles is to reduce health insurance costs, the use of financial penalties could put a firm at risk of lawsuits. The U.S. Equal Employment Opportunity Commission indicates it is looking into wellness program policies to see if some of them violate the Americans with Disabilities Act (ADA).
The Tribune Company, which owns newspapers in Chicago and other cities, applies a monthly surcharge of $100 to family health insurance premiums of workers or dependents who use tobacco. Wal-Mart applies an annual surcharge of $2,000 to employees who smoke. Clarion Health, an Indianapolis-based hospital chain, will charge employees who are smokers $5 each paycheck. Employment law experts recommend that a company should not discriminate against smokers by asking them to pay higher insurance premiums unless the higher fee is derived from a broader effort to help smokers quit smoking.
Another way employers are making intrusive interventions into employees’ health habits is by eliminating unhealthy foods that employees enjoy for snacks or meals within the company premises. Recently the HR director at Littler Mendelson, a San Francisco law firm, eliminated high carbohydrate and sugary breakfast foods that employees enjoyed, such as Krispy Kreme donuts, gooey sweet rolls, and huge muffins. These were replaced with yogurt, hard-boiled eggs, cottage cheese, and fresh fruit. Other companies, such as Yamaha Corp. of America and Caterpillar, are putting more healthful foods in corporate break rooms, cafeterias, and vending machines, while dumping donuts and other unhealthy foods. Florida Power & Light, Dow Corning, and Sprint all charge more money for unhealthy food and less for healthier fare. For example, Caterpillar offered garden burgers in its cafeteria for one dollar, and sales soared fivefold.
One company, Crown Laboratories in Johnson City, Tennessee, has gone so far as to require each employee to take an annual health assessment to force employees to live healthier lives. Based on a number of indicators, including blood pressure, weight, physical activity, and cholesterol levels, the employees are given a “wellness number” of up to 24 points. Those who improve their scores by at least 3 points a year, or maintain a score of 20 or more, will get a $500 bonus and extra days off. More than two-thirds of workers at Crown Laboratories are clinically obese, so the bonus compensates slender employees more than overweight ones. Smoking is officially against company policy, even during off-hours, and nicotine levels are measured in the health assessment. Employees who smoke are given approximately six months to quit, and if they don’t they are required to pay for their own health insurance premiums.
It has become common for companies to offer insurance discounts to employees who maintain a healthy weight. Some companies, however, are now offering standard health insurance plans only to those employees who are considered healthy. In these firms, overweight employees and employees who smoke are eligible for plans that have higher out-of-pocket expenses.
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Critical Thinking Questions
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12-13. Why are employers implementing policies that require employees to adopt healthier lifestyles? Do you think it is ethical when an employer decides to penalize employees who eat their favorite junk foods and gain weight or smoke cigarettes, which are a legal product?
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12-14. The enforcement of the wellness policies described in this case often falls into the domain of the HR staff, and they may be viewed by employees as the “wellness police.” How might this enforcer role undermine the credibility of HR staff in their work in other areas—such as EEOC compliance, training, and compensation—that require managers and employees to cooperate?
Team Exercise
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12-15. With a group of four or five students, discuss the legal implications of penalizing employees for not adopting healthy habits within wellness programs, as explained in the case. For example, can overweight employees seek protection under the ADA for being discriminated against by an employer that requires them to pay higher health insurance premiums than nonoverweight employees? What about when employers deny workers bonuses because they are overweight? Can an employee who smokes only away from the job and is penalized with higher health insurance rates claim under the law that he or she is a victim of discrimination? In fact, a number of states have passed smoker rights laws that protect the rights of smokers to use tobacco products within a state. Would these laws protect workers who smoke from being assessed higher health insurance rates by employers for violating an employee wellness policy when they smoke? Be prepared to present your findings to the other students in the class when called upon by your instructor.
Experiential Exercise: Individual
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12-16. Suppose you worked at a company that implemented a new wellness policy that required that you take health screenings each year for weight, cholesterol, tobacco use, and other health indicators. According to the wellness policy, if you do not achieve a high enough wellness score you will be required to make changes in your diet, exercise habits, or eliminate tobacco. Those who do not comply with the wellness policy face financial penalties. How would this wellness policy make you feel about working for this employer? Would you feel better (the employer cares about my health), worse (the employer is being unfair by trying to regulate my lifestyle), or indifferent to your employer for having this wellness policy? How would the policy affect your job behavior? Would you increase your effort, maintain it, decrease it, or start looking for another job? What explains your positive or negative reactions to this wellness policy? When called upon by your instructor, be prepared to offer your reactions to the wellness policy to other members of the class and see how they compare.