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Voluntary Versus Mandatory Wellness Programs
The astronomical costs of health insurance coverage and prescription drug plans for employees continue to plague employers. It has been predicted that, at the present rate, 'by 2008 the average Fortune 500 company may be spending as much on health benefits as it earns in profits.' ('Will Health Benefit Costs Eclipse Profits,' The McKinsey Quarterly Chart Focus Newsletter, McKinsey and Company. September 2004.) Illustrating the practical economic implications of these costs, General Motors Corp. reported that 'health care costs alone add $1500 to the sticker price of every automobile it makes, and estimates that by 2008 that number could reach $2000.' (L. Hudson Teslik, 'Healthcare Costs and U.S. Competitiveness,' Council on Foreign Relations. May 14, 2007.) An overwhelming amount of these costs are related to the treatment of preventable illnesses, which commonly result from the use of alcohol and tobacco products, and unhealthy diets.
With the understanding that preventable illnesses means preventable costs, many employers have instituted programs aimed at improving employees' overall physical and mental health. These strategies are commonly referred to as 'wellness programs.' This is a broad term that encompasses a range of plans geared toward improving employees' well being. These programs typically focus on smoking cessation, coping with various forms of mental illness (e.g., stress, anxiety and depression), combating obesity and risks related to unhealthy diets, and lowering alcohol consumption.
Wellness programs have taken different forms and each form presents varying degrees of risks and benefits. This article examines the types of wellness programs that have been used with increasing frequency, as well as the benefits and risks associated with those programs. As noted in Patricia Anderson Pryor's article in the August issue of this newsletter, www.lawjournalnewsletters.com/ Admin/issues/ljn_emplaw/15_4/news/ 149096-1.html, 'Wellness Programs: complying with the ADA and HIPAA,' wellness programs have the potential to run afoul of both the Americans with Disabilities Act of 1990 and the Health Insurance Portability and Accountability Act of 1996. In addition to those important considerations, there are numerous other legal risks and economic considerations of which an employer must be keenly aware when crafting and implementing a wellness program.
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