March 4, 2014

Wellness programs: well-intentioned or intrusive?

A panel discussion about the impact of employer-sponsored wellness programs generated lively debate Feb. 28 at the ILR Conference Center in Manhattan.

Such programs are encouraged under the federal Affordable Care Act (ACA) as a way to reduce health risks and, ultimately, health care costs. Regulations on incentives, not yet tested in the courts, went into effect in August 2013.

fitness class
Jason Koski/University Photography
Wellness programs are encouraged under the federal Affordable Care Act as a way to reduce health risks and health care costs.

More than 60 percent of employers have implemented wellness initiatives. But, less than 20 percent of eligible workers participate in wellness interventions like smoking cessation programs. Some employees, particularly those represented by collective bargaining agreements, have begun to push back against intrusive wellness program questions.

“May I be penalized because I can’t lose weight?” asked Esta Bigler ’70, director of ILR’s Labor and Employment Law Program, which organized the event. “Can my employer ask me about my plans to have a child in the next year?”

Mark E. Brossman ’75, a partner with Schulte, Roth & Zabel, moderated the discussion. Brossman pointed out that the United States leads industrial world in health care spending at about $2 trillion annually, or 16 percent of the nation’s gross domestic product. “We are just way off the charts at how much we spend on health care. We don’t spend health care money efficiently,’’ he said.

Wellness initiatives with the highest participation rates include flu shot programs, health fairs, health risk assessments and health screenings.

Some of the ACA-approved rewards for participation include gift cards, reduced health insurance premiums or fitness center discounts. Rewards cannot exceed than 30 percent of the total cost of employee insurance coverage.

Several audience members raised concerns about privacy issues and inconsistent application of the penalties levied against those not meeting wellness goals. But panelist Joan Smyth, a partner with Mercer Health & Benefits, said employers receive health risk details as aggregate totals, not on an individualized basis.

For example, by entering a smoking cessation program or weight loss program, employees can get their insurance premiums lowered. Employers can grant waivers to those with physician’s notes due to a disability, pregnancy or serious illness.

One audience member asked why mental health or substance abuse isn’t part of such wellness programs if they, too, can increase absenteeism. “Wellness programs are targeting risks,’’ Smyth responded. “The wellness program is about risks.”

“A lot of people in the disability community are opposed to calling it a ‘wellness program,’ since they are not well,” said panelist Elizabeth Grossman, director of protection and advocacy with Disability Rights New York, and a former regional attorney for the Equal Employment Opportunity Commission. “Employers should have clear defined standards for waiving it,” she said.

Tom Kennedy, a partner with Kennedy, Jennik & Murray, said wellness programs are a mandatory subject for collective bargaining. Kennedy said that he doubts a union would object to voluntary blood pressure or cholesterol tests. But, if the tests became a long-term monitoring program and offered a significant monetary reward for participating, “a union may want to be involved in bargaining the terms of the program.”

If an employer demanded that employees go to the gym twice a month or twice a year, the question becomes on whose time. “Very likely, the union will demand bargaining on that issue,” he said.

Kennedy differed with the other panel members on whether some incentives could be labeled “carrots” and others, like an insurance penalty for smoking, as “sticks.”

“We bargain for carrots,’’ Kennedy said. “We bargain against sticks. They are not the same thing.”

For example, an arbitrator upheld a union grievance against the Hershey Co., which charged employees who smoked $25 more per month for health insurance premiums. A federal court agreed that the extra charge was a penalty, not an incentive, so ordered that workers receive a retroactive credit.

Jon Craig ’80 is a journalist based in Westchester County, N.Y.