Carrots and Sticks

My posting is tardy but the New York Times article titled “The Smokers’ Surcharge” appeared a day after we discussed the legality of an employer terminating all employees who smoked cigarettes. The Times article focuses on insurance-premium surcharges, not termination, noting that “[m]ore and more employers are demanding that workers who smoke, are overweight or have high cholesterol shoulder a greater share of their health care costs, a shift toward penalizing employees with unhealthy lifestyles rather than rewarding good habits.” The law encourages financial incentives to employee participation in wellness programs but some employers use other methods to modify employee behavior:

Current regulations allow companies to require workers who fail to meet specific standards to pay up to 20 percent of their insurance costs. The federal health care law raises that amount to 30 percent in 2014 and, potentially, to as much as half the cost of a policy.

When Wal-Mart Stores, the nation’s largest employer, recently sought the higher payments from some smokers, its decision was considered unusual, according to benefits experts. The amount, reaching $2,000 more than for nonsmokers, was much higher than surcharges of a few hundred dollars a year imposed by other employers on their smoking workers.

And the only way for Wal-Mart employees to avoid the surcharges was to attest that their doctor said it would be medically inadvisable or impossible to quit smoking. Other employers accept enrollment in tobacco cessation programs as an automatic waiver for surcharges.

“This is another example of where it’s not trying to create healthier options for people,” said Dan Schlademan, director of Making Change at Walmart, a union-backed campaign that is sharply critical of the company’s benefits. “It looks a lot more like cost-shifting.”

4 thoughts on “Carrots and Sticks”

  1. I think employers have the right to terminate employees or make them pay extra on their insurance costs if employees are overweight or smoke. Because businesses are liable to employees by providing them with health and insurance benefits, it seems fair that it is the employers’ business who they are essentially investing in. 

    Also, employers should be allowed, on behalf of their business, to terminate employees for the sake of the business’ image. For instance, if a consultant who is a smoker comes inside from smoking and has a meeting with a client, that client may be turned off by the smell of smoke, which reflects negatively on the business’ image.

    -Jonathan Garnick

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