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SHOULD ALL EMPLOYEES PAY THE SAME AMOUNT FOR HEALTH INSURANCE?

With health care costs rising faster than inflation, employers look for ways to cut the cost or at least slow the increase. Employees with unhealthy lifestyles need more health care, so coverage for an unhealthy work- force costs more. Therefore, and perhaps also out of concern for employees’ well-being, employers want to motivate employees to take better care of their health.
One idea is to offer discounts or penalties on the em- ployee’s share of health insurance premiums. Michelin North America tried awarding a $600 credit to employees who completed a health assessment or participated in creating an action plan to improve wellness. Health costs rose anyway, so Michelin limits the credit to em- ployees who meet health standards in three or more categories, such as blood pressure, cholesterol levels, and waist size. Employees who do not qualify may earn a smaller credit by signing up for health coaching.
The Affordable Care Act encourages employers to reward health-promoting behavior. Rewards and penal- ties may not exceed 30% of the employee’s costs for the health insurance (50% for participation in a stop- smoking program). The typical amount of the incentives is 5% to 10% of an employee’s share of the premium.
Even when a company’s incentives meet legal requirements, people question whether they are fair and respect employees’ privacy. Some question whether employees will actually change their behavior—and improve their health—in exchange for a few hundred dollars. Perhaps the programs will simply reward people who are already taking good care of their health. Others feel it is unkind or unfair to penalize less healthy people, who already have higher bills for health care because they need more services. On the privacy question, CVS and other companies using incentives say they do not see individuals’ health information. Rather, their insur- ance companies see the data and may report the overall costs and benefits of the program.
1. Suppose an employer gives employees an insurance discount based on number of hours of physical fitness activities. Who benefits from the program? Who is harmed? Is this ethical?
2. Suppose an employer charges all employees the same premium, regardless of their health habits. Who benefits? Who is harmed? Is this ethical?

To avoid discrimination under the Americans with Dis- abilities Act, employers must reward behaviors employees are able to do and must provide alternatives to accommodate people with disabilities. Thus, instead of having a goal to walk a given number of miles, employees might wear a fitness tracking device such as Fit- bit or Jawbone Up and measure their progress toward individual goals or measure a group’s overall progress toward a shared goal. Also, a doctor can exempt an employee from a program; you would not, for example, want employees with anorexia or bulimia to enroll in a weight-loss rewards program.

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