The Wall Street Journal “Providing Health Benefits on a Budget” reports that non-self-insured employers are trying to motivate employees to undergo “voluntary” health screenings and participate in wellness programs. The screenings cover both controllable items such as smoking and body-mass index, as well as hereditary health issues like high blood pressure and cholesterol. Discounts are provided in deductables and co-pays for those that score well. The Journal does not say whether existing medical conditions are scored.

The Journal continues by discussing how smaller companies can buy services such as chronic disease management services for their employees at a reasonable price. The entire focus is on how small and medium businesses can lower healthcare cost through employee behavioral changes. But, employers are frustrated by the low level of volunteering.

Typically companies with 1 or 2 to 50 employees get guaranteed issue, with aged based community rating, if they do business in only one state. Single state employers with greater than 50 employees do not get guaranteed issue in most states, but still fall under state regulation. States have no control over the benefits issued by companies with employees in multiple states. The importance of this distinction is that employees of interstate companies are protected by ERISA, which I believe precludes medical underwriting.

When do rewards for good behavior cross the line to become medical underwriting? Key factors include:

1. Reward Amount. A large reduction in premiums, deductables or co-pays implies medical underwriting. Certain employees might not be able to afford medical care without the discounted deductables and co-pays. Some might not even be able to afford the premiums without the reward.
2. Control. When the reward is based on a health condition that the employee cannot control through behavior alone, medical underwriting is implied.
3. Coercion. When an employee would be coerced into treatments that they do not want, medical underwriting is implied. This is where disease management might come into play.

Increased affordability is self explanatory. Control and coercion are more complex. Most would agree that except in rare instances body-mass index or weigh can be controlled by behavior. So let’s move on to high blood pressure, high cholesterol and other metabolic diseases. Diet and exercise can help and should be rewarded. But making the reward contingent on the employee taking medication crosses the line.

I am especially concerned about long-term use drugs such as statins, which have major side effects. Employees should not be priced out of buying health insurance, or the use of their health insurance, by their treatment choices. Each employee needs to be free to balance their own risks and rewards.

In "Employer Wellness Programs Pose Employee Risk", I go further into the risks of employer medical fishing expeditions.