Higher Premiums Expected for Workers With Unhealthy Habits
A small number of U.S. employers require employees with unhealthy habits to pay more for health insurance as part of an effort to reduce costs, but the practice likely will expand after the finalization of federal rules "spelling out what's allowed by law," AP/USA Today reports.
Currently, some employers deduct more from the paychecks of employees with unhealthy habits for health insurance, increase surcharges for those workers or offer discounts and rebates to employees with healthy habits.
Linda Cushman, a health care strategist with Hewitt Associates, said, "Employers are paying the lion's share of health care costs and feel that they have the right to call the shots."
Some employees and advocates have raised legal concerns and accuse employers that use the practices of "trying to control private behavior and amassing huge amounts of personal health information," according to USA Today.
National Workrights Institute Legal Director Jeremy Gruber said, "It's a backdoor approach to weeding out expensive employees."
However, employers "wary of legal problems feel more confident" after the July 1 finalization of federal rules on the use of the practices in compliance with the Health Insurance Portability and Accountability Act, USA Today reports. Under the rules, discounts and rebates for employees with healthy habits cannot exceed 20% of the cost of health insurance. The rules also require employers to consider the Americans with Disabilities Act and other federal and state laws.
Garry Mathison of the employment and labor law firm Littler Mendelson said, "Employers know they have to do something," adding," I believe that in just the next two years, more employers will turn to penalties to change employee behavior."
Helen Darling, president of the National Business Group on Health, said that most employers prefer discounts and rebates for employees with healthy habits than increased payments for those with unhealthy habits. She said, "I think it's a mistake to use penalties for something as complicated as maintaining weight in a society that does everything to make you inactive. It can make people mad, and we are in a war for talent" (Cornwell, AP/USA Today, 9/10).