Could You Lose Your Health Insurance Because of This Rule?

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If you work in a typical office in America, you’ve probably been roped into at least one employee wellness program in the past few years. Whether you were encouraged by your co-workers to join a kickball league, compete together in your office’s own version of The Biggest Loser, or you get money back for getting a blood test each year, employer-sponsored wellness programs are fairly common. Now, they’ve become so ubiquitous that some employers are treating them as mandatory – and you could lose your health insurance or face fines if you don’t participate.

Many employers call their wellness programs a “benefit,” and 76% of companies surveyed by the Society for Human Resource Management said they offered some sort of program in 2014, an increase from 70% the year before. About 72% of the companies in the survey said they believed the programs helped to reduce health care costs, and 78% said the programs were somewhat or very effective in improving the physical health of employees.

Do wellness programs work?

If that were definitely the case, it might not seem so bad that companies mandate participation, since we could all stand to be a little healthier. But the debate is still wide open about whether the programs are truly effective. Health care costs do decrease over time, but not at a rate that necessarily warrants required participation, the RAND Corporation found in a 2013 report. “Participation in a wellness program over five years is associated with lower health care costs and decreasing health care use. The average annual difference is an estimated $157, but the change is not statistically significant,” they concluded.

However, several federal judges have backed employers who are requiring some form of wellness program participation. Most recently, a federal judge in Wisconsin ruled that Flambeau, a plastics maker employing about 1,600 people, could require biometric testing and a “health risk assessment.” If employees refused, as did one employee named Dale Arnold, the company was within its legal right to cut off health insurance and require Arnold to pay the entire government-sponsored COBRA coverage instead.

Flambeau was sued on behalf of Arnold by the Equal Employment Opportunity Commission, which argued that withholding health insurance based on not participating in a wellness initiative was discriminatory. But on December 31, 2015, a federal judge ruled that the requirement was legal, as long as the biometric information is used for overall health coverage. In this case, Flambeau argued the data is used to determine the risk of its insurance pool, therefore being completely legal.

Fines, penalties for non-participation

Flambeau is one of the more extreme cases, but employees working for other companies who refuse to participate in wellness programs also face steep penalties. New Jersey-based Honeywell also requires its employees to submit to a screening, which measures blood pressure, glucose levels, body mass, and cholesterol. Employees who don’t comply face a $500 surcharge (read: fine) and the loss of contributions to a health savings account, worth $1,500 each year.

It’s not surprising that employers want to require these screenings – and it’s not because they’re altruistic about your weight loss goals or eating more veggies. Health insurance costs continue to rise, and employers pay a majority of that burden. Employers are passing more of that cost on to their employees through higher deductibles, but health insurance premiums grew about 4% last year, according to research by the Kaiser Family Foundation. That’s slowed down from the average 11% growth in the early 2000s, but it’s still thousands of dollars that employers need to cover – or pass on to their employees.

In that light, wellness programs that can lower the amount paid to insurance companies (such as smoking cessation programs, for example), are even more popular than before. It could also help stave off expected higher rates during this year and next, as health insurance companies taking on new enrollees through the Affordable Care Act said the new customers are sicker than expected. As a result, rates could increase 20 to 40% this year alone.

There’s no question that everyone is feeling the pinch when it comes to health care costs rising, and it doesn’t look like an end is in sight. As long as your employer continues to use that health data for lowering insurance costs, you’re likely stuck with those exams, or paying a hefty bill as an alternative. Whether it’s for your own good or for the good of your company is besides the point.

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