Higher Insurance Premiums For Smokers And The Obese

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The perils of smoking and obesity have long been the topic of conversation in doctors’ offices and between nagging family members. However, employers are jumping on the bandwagon by imposing higher health insurance premiums on employees who maintain unhealthy lifestyles. CVS has recently gained significant attention after it was alleged that employees were charged a $600 a year penalty for failure to divulge information concerning their health, including weight and body fat levels. While the company couched the policy as a “voluntary” measure, employees who fail to attend the “voluntary” screening and subsequently report information regarding, blood pressure, glucose levels, height, weight and body fat, would be subject to a $50 per-month surcharge.

CVS’s actions parallel those taken by an increasing number of employers seeking to minimize health care costs.  As insurance costs continue to climb, employers are demanding that employees who smoke or are overweight bear a greater percentage of the expense. While previously employers sought much more amicable means of encouraging healthier lifestyles through such mechanisms as voluntary weight loss programs and smoke cessation initiatives, these methods generally proved unsuccessful.

While many employees object to such penalties they have met little resistance in the court room. The Patient Protection and Affordable Care Act, (“Affordable Care Act”), will permit employers to charge as much as 50 percent more for employees who decline to participate in a wellness program.  Conversely, the Affordable Care Act, permits employers, beginning in January 2014, to reward individuals meeting specified health care goals. The penalties at issue here, however, have not yet been tested.

In assessing a potential wellness plan employers must also be careful not to run afoul of other federal anti-discrimination statutes including the Americans with Disabilities Act. The plan should be tailored to the needs of the workforce while being mindful of potential privacy laws or other regulations concerning an employee’s conduct outside the office.

If you or your institution has any questions or concerns regarding any employment related issues, please email Cynthia Augello at caugello@cullenanddykman.com or call her at (516) 357-3753.

A special thanks to Cynthia Thomas, a law clerk at Cullen and Dykman LLP, for help with this post.