There are certain questions your employer can not legally ask you. For example, your sexual orientation, religion, and age are off limits, but your weight, as uncomfortable as it might be, is on the table. And one company is asking its workers to fess up their number on the scale to help combat rising health-care costs.
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CVS Caremark (NYSE:CVS) announced this week it will be asking employees receiving employer-sponsored health-care coverage to reveal their height, weight, body fat percentages to the company’s insurance carrier as part of a wellness screening to encourage workers to be more healthy and proactive in their health care to keep a lid on coverage costs. Many companies are worried about the Affordable Care Act’s mandate that requires some businesses to provide health insurance.
CVS employees can reportedly opt out of the requirement, but will face a $600 annual charge. The Rhode Island-based company and has more than 200,000 workers, and says the move is to encourage employees to live healthy lifestyles.
“We want to help our employees to be as healthy as they can be, which is why we decided to implement this plan. In fact, we have been working for a number of years on ways they can improve their health through preventive measures,” the company said in a statement. It also said that incentive programs like this are not new and the companies across the country have similar plans. “To encourage a higher level of participation in our wellness review, we reviewed best practices and determined that an additional cost for those who do not complete the review was the most effective way to incent our colleagues to improve their health care and manage health costs.”
The drugstore operator also says it will pay for the health reviews and that no one within the company will be able to access health records and personal information because it will all go to a third-party administrator. Managers will not be able to access information about their employees’ weight, for example.
Health-care reform’s insurance mandate kicks in next year, and experts expect companies to outline more initiatives like this one to help curb their costs. In fact, Gina Payne, national director of Wellness at CBIZ Benefits & Insurance Services, says this trend has been on the rise in the last five years.
She says many employers already ask their workers to complete a health-risk assessment and about 49% of employers have a workforce health strategy in place. In addition, CBIZ reports another 40% intend to implement a similar strategy in the next two years.
“Employers need to keep their employees – and their benefit plans – healthy. Health-care reform makes this even more important,” Payne says in an email message. “Employers are accomplishing a major shift in thinking about the economic value of health and overall wellbeing. Through effective wellness strategies, opportunities exist to address health care costs, productivity loss and performance.”
The CDC reports that 60% of health-care expenditures are due to preventable illness or modifiable risks, cites Payne. She adds that illness also affects productivity: for every 100 employees, 11,500 hours of lost productivity occur per year due to health conditions. That’s the equivalent of five full-time employees out of 100 where an organization has lost an entire year’s worth of productivity, she says.
While CVS has taken some heat from the initiative, companies are likely thankful it gave them the option to implement similar programs, says Kip Piper of Health Results Group.
“I’m sure a lot of other large employers want to take CVS out for a beer for being the first company to take the heat,” Piper says. “But historically, sticks work more than carrots.”
The “carrot” approach of giving employees incentives to participate in wellness programs has seen success in companies across the country, Piper says. She also sats employers saw a return on investment because workers were in better health and often call out sick less.
The ACA will make insurance more expensive for employers, so they want to get the most bang for their buck from those they are insuring, Piper says. He adds that when lawmakers were crafting the health-care legislation, Democrats pushed for the loosening of federal regulations to allow employers to be more assertive with programs that encourage people to participate in wellness initiatives. “A large company like CVS, which is no doubt self-insured, doesn’t have much information about the health of its employees.”
Rob Wilson, CEO of human resources company Employco, says more large employers will likely follow CVS’s lead as a way to control costs.
“Large companies are self-insured to a certain extent, where smaller companies are not,” he says. “I am not sure this would make healthy people more interested in working at a company, but it may make someone who isn’t as healthy less interested.”
Companies are increasingly interested in workers’ health, with some having surcharges for employees who smoke. In a way, this move by CVS is no different, Wilson says.
The downfall with asking employees for their body fat percentage and deciding on their wellness is that the two are not necessarily correlated, Piper says.
“I’m sure every NBA player probably has a BMI that suggests they are obese, and they are not,” he says.”So contractors and companies have to use this information in a positive way. It’s tricky and hard to do this right—it has to be done very carefully.”