Studies show that roughly five% of employees drive about 80% of your health benefit costs.

No shocker here –  Smokers and obese staff members are the highest risk group for developing the sorts of chronic health problems that send costs through the roof.

A small, but rapidly growing number of corporations are taking desperate measures to avoid the costs associated with these employees. the step can be broken down into three levels of aggressiveness and potential risk/reward.

Level one –  the company installs a health promotion program in which non-tobacco use employees and those who commit to maintaining a healthy weight receive financial incentives that lower their share of monthly insurance premiums.

Level two –  the business disqualifies job candidates who smoke or are significantly overweight from hiring consideration. Alternatively, some firms require new hires to undergo a health risk (assessment|appraisal} as a condition of being hired.

Level three –  the corporation docks pay or fires workers who fail to control their lifestyle-related health risks. Example –  A corporation called Clarian Health has sent notifications to workers that beginning in 2009, workers who smoke or chew tobacco will be charged $5 per paycheck.

Are these strategies legal? at level one, the answer is a qualified yes. HIPAAs non-discrimination rules permit such incentives under several conditions.

Health Promotion incentives walk a fine line as for health insurance portability and accountability act (HIPAA)s non-discrimination rules. It’s legal to reward staff members for wellness participation but its illegal to punish those who fail to improve their health.

Example –  If an staff member follows a weight-loss program in good faith but fails to lose weight, you can’t withhold the incentive. Likewise, if an staff member fails repeated tries to quit tobacco use, you’re still legally obligated to give them another shot next year.

Additionally keep in mindthat, by law, the size of the reward or penalty under your health promotion program cant exceed 20 percent of the sum cost of coverage.

The other two are still largely uncharted waters in the courts. Employers considering these policies should proceed with extreme caution.  Remember that the question of “can you do it” (i.e., is it legal?) is different from “should you do it?” (i.e., is it good business?)