Case Study Overview
Health Insurance tied to Wellness Plans by Employers
CVS Caremark drug stores recently made news by informing its employees that the company’s health insurance would add a $50 monthly fee to their insurance if they did not participate in the company’s wellness program. The program includes a weigh in and blood tests. (Today, 2013) Bank of America, my employer, recently instituted a similar program. The Kaiser Family Foundation has found that almost half the companies in America with over 200 employees have wellness programs (Nussbaum, 2013). A wellness program ties incentives to activities such as joining a gym or getting a blood-pressure test or specific targets such as body-mass index (Nussbaum, 2013).
Under regulations released by the Obama administration, Obamacare rules, companies in the US are allowed to charge higher insurance premiums to employees who don’t meet the company’s health goals (Nussbaum, 2013). Conversely, employers are also allowed to reward employees who meet employer’s health conditions. The regulations under the 2010 health care law allow employers to charge as much as 30 perfect of their insurance premiums if they do not meet the stated goals. That is an increase from the pre-Obamacare rules of 20 percent (Nussbaum, 2013).
Bank of America offers “Educational/Awareness Incentives” (Wieczner, 2013). An Educational/Awareness Incentive offers an assessment of their personal health and risk factors. Ours is very typical of the program and we are required to take a health assessment online that determine our personal activity level and point out any health risks we may have. We also get blood work done, our BMI measured, our weight and our waist measured. If we do this, we receive a $500 credit on our insurance premium. If we fail to participate, $500 is added to our premium. We also have the $500 added to our premium if we are found to have misrepresented ourselves on the assessment, for example if we say we don’t smoke but nicotine is found during our blood work. Most of the theories and practices that I have studied so far in my graduate work has stressed successful companies focus on employee’s work performance and work relationships. The practice of employers asking personal and invasive questions about an employee’s health and lifestyle seems to contradict these practices. This invasion of privacy is a slippery slope for many employees. Consumer advocate groups are arguing that the wellness programs offer the employer the ability to differentiate in health coverage costs among employees. This differentiation is unfair and will amount to employers' policing workers' health care policies (James, 2012). There are legal and regulatory issues that many companies need to discuss. There is also a possible conflict between American with Disabilities Act (ADA) and Health Insurance Portability and Accountability Act (HIPPA) (Today, 2013). HIPPA allows companies to offer financial incentives for wellness programs however the ADA states all questions about an employee’s health must be voluntary (Today, 2013). There are also financial ramifications to the wellness question. Studies indicate, in large firms, that the average employer medical costs fell $3.27 for every dollar spent on wellness programs, and costs for employee absentee days dropped an average of $2.73 (James, 2012). Again, consumer advocate groups and workers unions are concerned with wellness programs that are contingent upon meeting employer goals. These groups are concerned that instead of actually increasing employee’s health, the companies are simply shifting health care costs from the healthy to the sick (James, 2012).
My case study will focus mainly on the impact of the wellness initiatives tied to health care premiums on employees. As privacy is a