Unhealthy workers to pay extra for their bad habits

EN Industry News & Insights Workopolis B2B Business woman eating healthy vegetable salad.

With skyrocketing healthcare costs, companies in the U.S. have been trying various methods of gently nudging their employees on the path towards better health. From discounted, free, or on-site gym memberships, to free medical screenings, smoking cessation treatments, and the removal of carbonated beverage and junk food vending machines are all common efforts these companies use to encourage better employee health, yet portliness and smoking persists.

The solution? Reward workers who complete voluntary health programs with up to 30% of healthcare costs that are paid for by the employer, and reprimand other workers for their unhealthy lifestyle choices. Apparently, the U.S. health-care overhaul expected to roll out in 2014 will include new rules that allow employers to use more direct methods of incentivizing healthy workers while “punishing” those who display unhealthy habits. It’s estimated that in 2014, almost 40% of large U.S. corporations will implement additional fees in the form of surcharges for workers who do not meet company-set health goals, according to survey released by Towers Watson and National Business Group on Health. Some of these surcharges will take the form of higher insurance premiums and higher insurance deductibles. This is in contrast to two years ago when 19% of these same U.S. companies had these types of penalties for those who do not meet their health requirements.

Meanwhile…north of the border…

Another survey by Towers Watson found that 76% of Canadian organizations are planning to increase their support for workforce health programs in the upcoming couple of years. While it’s already very common for companies to offer wellness programs, such as discounted gym memberships, smoking cessation programs, employee assistance programs, and healthy living education, the survey indicates that companies plan to pull together these current programs, while adding even more, to create a full-fledged health and wellness strategy for their workforce.

Under this new strategy, basic health services, such as health risk assessments, biometric screenings, vaccination programs, health information distribution will continue to exist alongside more extensive programs such as on-site physicians or dietitians, web-based behavioural health services and mobile apps.
While “punishing” unhealthy workers might seem harsh at first, the investment in these kinds of programs has numerous benefits for both the employee (confidence, more focus, etc.) and the ROI is also expected to be high for the employer:

  • Increased productivity
  • Increased employee retention
  • Decreased rate of illness and injuries
  • Reduced employee absenteeism
  • Decreased disability and health costs

With rising healthcare costs, along with the increased pressure to maximize productivity, it seems almost inevitable that at some point, companies could no longer ignore the impact of employees’ health and lifestyle choices.