Kaiser Health News has an interesting report out on the rise of ‘voluntary’ wellness programs across the country—programs which fine or reward employees based on whether they participate in regimens designed to make them healthier (and thus cheaper to insure). Employers have started to institute these penalties and the Equal Employment Opportunity Commission has responded by floating a rule to govern these programs:
Under the proposal, wellness programs would be considered voluntary so long as the employer rewards or penalizes an employee no more than 30 percent of the cost of health insurance for a single worker. Since the average cost for such coverage is $6,025 a year, the 30 percent limit would be about $1,800.Employers cannot fire workers for declining to participate nor can they deny them coverage, the proposal says. They also must give workers a notice explaining what medical information will be obtained by the wellness administrator — often a private contractor — and how that might be used.
Some people, however, are already raising warning flags:
The equation tilts too far against workers “when … employers can charge you a couple thousand dollars more for refusing to give private medical information, [that] doesn’t sound very voluntary to me,” said Samuel Bagenstos, a University of Michigan Law School professor.
It makes sense for insurers to manage their risk pools by incentivizing healthier behaviors directly. Charging people who present health risks and don’t take steps to lower those risks—by quitting smoking or losing weight or what have you—is part and parcel of what insurance is all about: matching premiums to risk factors.But doing it through the employer-employee relationship adds a further, more insidious level of coercion into the process. Employers already have a good deal of control and leverage over the lives of their employees; giving them more power to dictate behavior (as Bagenstos points out, a penalty complicates any claim to this being ‘voluntary’) is not sound policy. No matter how caveated it all is in the statutes—workers can’t be fired, denied coverage—this is precisely the kind of arrangement that could lead to all sorts of unintended consequences.And indeed, we should be trying to move the whole system in the opposite direction. Employer-provided health care benefits are one of those zombie artifacts of an era where lifetime employment with a single company was very much the norm—an era which is quickly receding into the past. It’s time to make a serious effort to delink health care and other benefits from employment. The sooner, the better.