Why Workers Should Be Wary About Corporate Wellness

By Steve Early for the Nation

A growing number of US companies are now urging their employees to slim down, exercise more, reduce their cholesterol and blood pressure levels, or quit smoking—all socially desirable goals. But if these workers fail to cooperate with the new corporate “wellness” regime and adopt a healthier lifestyle (under the tutelage of their employer), the penalty, for many, will be higher out-of-pocket payments.

Corporate America has long been shifting the burden of medical costs onto workers. Cost-sharing negotiated with unions or, more commonly, imposed unilaterally by non-union firms has raised labor’s share of health insurance premiums to an average of 18 percent for individual coverage and nearly 30 percent for families. Workers or their dependents also face escalating deductibles, co-pays and co-insurance, which can add hundreds or thousands of dollars to their annual healthcare spending.

Now, under the banner of health promotion, management is making some workers pay more for their insurance based on individual differences in their medical condition or lack of adherence to “wellness” standards. This new, more individualized form of cost-shifting threatens to stigmatize and penalize the chronic health conditions of millions of workers, expose some to job discrimination and undermine labor solidarity in the process. In addition, workplace privacy advocates are warning about the invasiveness of so-called “health risk assessments”—now commonly required in corporate wellness programs—because these surveys probe off-duty behavior related to sex, drugs and alcohol.

Under the federal Health Insurance Portability and Accountability Act (HIPAA), management can already compel some workers to pay up to 20 percent more than others covered by the same medical plan. According to Lewis Maltby of the National Workrights Institute, “all that is required is that the penalty be ‘designed to promote good health.’ The employer is not required to demonstrate that the amount approximates the increase in cost due to an employee who engages in any unhealthy behavior.” Under President Obama’s Affordable Care Act, “this abuse will continue to grow,” Maltby predicts, “when the penalty employers can charge without justification increases to 30 percent” next year.

Among the other groups sounding the alarm about this trend are Families USA, Georgetown University’s Health Policy Institute, the American Cancer Society and the American Heart and Diabetes Associations. A report by the HPI at Georgetown called in February 2012 for new federal and state standards that will protect consumers from “programs that inappropriately punish workers in poor health, are overly coercive, or create perverse financial incentives that result in poorer health outcomes.”

As Cancer Society lobbyist Dick Woodruff told National Public Radio, “The whole point of healthcare reform is to make sure that everyone gets insurance. And if people have to pay more because they’re unhealthy, that’s a barrier. It defeats the whole purpose.”

California Nurses Association co-president DeAnn McEwan, a nurse for nearly forty years, sees great risk of “discrimination through backdoor redlining for individuals with pre-existing conditions and disabilities.” She points out that the workers “more likely to have the health conditions that wellness programs target are low-income individuals and racial/ethnic minorities.” By no coincidence, she says, they also “face barriers to health such as unsafe neighborhoods; poor air quality; substandard, decaying housing; and lack of access to affordable, healthy food.”

Despite these warnings, many other unions are buying into wellness schemes under management pressure for more costly contract concessions. Employers and their consultants pitch these programs, initially, as a way to provide “discounts” for workers who sign up for annual health evaluations, subsidized gym membership, smoking cessation classes or other forms of health counseling. In Chicago, for example, the Chicago Teachers Union returned from its inspiring strike last September with a freeze on insurance rates but a new wellness plan similar to the one covering 38,000 other city employees. According to one top CTU official, it “was definitely one of the least popular parts of the contract settlement” because of “concerns that what we’re seeing is just the thin edge of the wedge.”

The teachers’ program begins early this year with biometric testing for cholesterol, blood pressure and sugar levels, weight and body mass index. Teachers with an identified problem may be assigned a health coach who works for a third-party vendor. All must log into a wellness website, every month, earning points for reading articles or watching videos; the penalty for failing to do so will be $50 monthly fine. A family with two adult members that opts out of the program entirely will pay $1,200 more annually for their insurance. In the union’s next round of bargaining, this CTU leader worries that management “may try to attach penalties for being overweight or a smoker” in a profession where “many negative health outcomes have a lot to do with job stress.”

Efforts to promote better eating, more walking, bike-riding or working out at the gym would be quite positive—and far more effective—if they were part of a broader campaign that addressed the societal roots of bad nutrition, obesity, diabetes, high blood pressure or heart and lung problems. As CNA’s McEwan points out, many chronic, costly conditions have socioeconomic causes, including exposure to hazardous workplace environments. They’re not just the product of bad individual choices by workers or their family members—some of whom are just showing the side-effects of consuming their own employer’s heavily marketed food products.

Consider, for example, the chutzpah of PepsiCo’s insistence that its Teamster-represented drivers and warehouse workers in upstate New York pay a “sin tax” of $50 a month if they smoke or have weight-related medical issues like hypertension, high-blood pressure, and diabetes. As PepsiCo spokesperson Dave DeCecco told Bloomberg News in February 2012, “These programs enable our associates and their families to have a healthier lifestyle.” DeCecco didn’t say whether that lifestyle shift should also include not eating the salty, sugary, high-fat junk food that generates billions in profits for PepsiCo, while playing a major role in our national epidemic of obesity.

In California, such corporate hypocrisy takes a different form in healthcare. Some of the same hospital chains that have pushed hardest for “wellness” penalties don’t want to make changes in working conditions that would reduce job stress, fatigue, unsafe workloads and other causes of occupational illness and injury. Better nurse/patient staffing ratios, limits on forced overtime, guaranteed lunch and break time, and more lift equipment to reduce back injuries would all contribute to employee wellness (and lower healthcare costs, by increasing patient safety). But Kaiser Permanente, Sutter Health, Dignity Healthcare and Daughters of Charity Health Systems all want to shift the focus, in bargaining, from their own unhealthy practices to the off-duty behavior of individual employees, reports John Borsos, a contract negotiator for the National Union of Healthcare Workers (NUHW), which recently affiliated with the CNA

Borsos is particularly critical of the “Total Health Program” created at Kaiser Permanente (KP), with the backing of unions involved in Kaiser’s Labor-Management Partnership (LMP), led by the Service Employees International Union (SEIU). “Total Health” is being touted by SEIU as “a long-term business strategy for KP” that will give it a “competitive advantage” over other health maintenance organizations. If cost savings are achieved, Kaiser promises a monetary bonus for work groups that complete an annual health assessment, update their “biometric risk screenings,” and “maintain or make steady improvements on key biometric risks (weight, smoking, blood pressure and cholesterol).”

Individual compliance will be “encouraged” by a network of “Wellness Ambassadors”—derided as “wellness cops” by the NUHW– who will get paid time off from Kaiser for their activities. Borsos predicts that Kaiser personnel who decline to participate “will be subject to enormous pressure from co-workers when a portion of their future pay is tied to everyone’s participation.” For more on the NUHW-CNA critique of “Total Health” at Kaiser, see “Which Way to Wellness: A Workers Guide to Labor and Workplace Strategies for Better Healthcare.” (http://www.stopseiucuts.com/wp-content/files_mf/whichwaytowellnesswinslow.pdf). Labor Notes has also published an excellent guide for unions engaged in bargaining about wellness issues. (See http://labornotes.org/2013/01/what-do-when-boss-catches-wellness-fever.)

The danger of a membership backlash to the wrong kind of wellness plan is very real. In 2011, labor organizations represented on Oregon’s Public Employee Benefits Board (PEBB), agreed to a new “Health Engagement Model” (HEM), that required mandatory “risk assessments” (including waist measuring), plus penalties for non-compliance. According to one labor educator in the state, the HEM “riled up many workers, who turned their fury and frustration on the unions.” The Service Employees International Union was among those soon apologizing for “a poorly communicated change to our health plans that included a punitive surcharge” and “got us started on the wrong foot.” Labor officials later persuaded the PEBB that non-participants in “health engagement” should no longer be subject to the surcharge; instead, participants are now rewarded with an additional $17.50 per pay period. However, the health plan forces non-participating workers and their families to pay $100 to $300 more in deductibles, a “punitive aspect” still opposed by their unions.

A survey of 355 private companies by Towers Watson, a leading HR consultant, showed a 50 percent increase in their use of such financial incentives and penalties between 2009 and 2011 Thirty-eight percent of these firms reported further plans to penalize workers who fail to meet health improvement goals tied to their cholesterol levels or body mass index. Clearly, if unions don’t get their act together on “wellness,” their members are going to get rolled, one way or another.

The best labor response to these schemes would be to shift the terms of the wellness debate, at the bargaining table and in public policy arenas. Unions need to take a more holistic approach to their members’ health problems, one that doesn’t let Corporate America off the hook for its role in producing the social determinants of poor health, including poverty, inequality and unhealthy jobs.

Labor should also make wellness controversies a teachable moment for workers upset by punitive medical plan changes but not previously supportive of or well-informed about single payer healthcare. “Medicare for all” would eliminate job-based benefit coverage and the new forms of cost-shifting and differential treatment now being introduced under the guise of “getting healthy.” In nations with social insurance systems, health outcomes are better, in part, because achieving public health goals, like reduced obesity, isn’t left to companies more concerned about their bottom line than workers’ waistlines. American workers who don’t want their boss playing “wellness cop” need both short-term legal protection and a longer-term political solution.

Steve Early spent many years helping members of the Communications Workers of America bargain about health insurance issues. He is the author, most recently, of The Civil Wars in U.S. Labor from Haymarket Books. He can be reached at Lsupport@aol.com.


  1. Plantiful on February 28, 2013 at 6:12 pm

    The obesity rate in this country is far, far, far beyond reasonable, and it is largely a lifestyle condition brought to us by fervent marketing of boxed dinners, over-sized and calorie-stuffed restaurant food, combined with a general lack of physical exertion in the population.

    As a result, we have at least a 50% overweight or obesity rate in some of the better states, with hypertension, diabetes, heart disease, and cancer rates ready to follow. These are lifestyle choices, and if people choose to live in this manner, then they certainly should be made to pay more for their health insurance– BUT not by their employer but by the health insurance company itself: after going to a physical, a patient’s BMI is reported, and if the patient is out of shape and with a BMI is greater than 25, insurance surcharges can start to be charged to the policy holder, for each member covered in the policy in such a condition. Parents raising their kids poorly, can be charged for essentially abusing their children. This is not a tax or a penalty, but a payment into a health system that will be paying for their future or current lifestyle conditions.

    If the surcharges are sufficient, it will help pay for our exorbitant health costs, and perhaps it may make them think about what they are doing to themselves enough that they actually decide to smarten up an start eating proper food and perhaps move off of the couch.

    The genetically obese are a rarity in comparison to the lifestyle folks. There are always exceptions.

  2. CityguyUSA on February 28, 2013 at 10:28 pm

    Charging more for workers with differing health problems defeats the whole purpose of the insurance industry besides the fact that it all can be misleadingly wrong in outcomes.

  3. michelle on March 18, 2013 at 6:14 pm

    There is an affordable option available for corporate wellness programs. Statistics show the steady increase of businesses including corporate chair massage services in their wellness programs. Employees are happier, healthier, use less sick days and work better together. The small investment for regular chair massage in the office brings great reward to both the employer and employee.