Major Employers Imposing Penalties for Unhealthy Workers

Major Employers Imposing Penalties for Unhealthy Workers

As reported this week in The Wall Street Journal (, Michelin North America, Inc.—a branch of the worldwide company that employs over 100,000 people—has decided to implement a penalty for some of its less healthy workers.  According to a recent announcement by the tire-maker, employees with high blood pressure or certain waistline sizes will have to pay as much as $1,000 more for employer-provided healthcare beginning in 2014.

And this arrangement is fast becoming the norm.  Corporate spending on health care is now about $12,000 per employee, and businesses are looking for creative ways to bend that cost curve.  Insurers have begun to implement wellness incentives on their end, and businesses are following suit more directly.  However, instead of the more traditional deductible reductions for completing health-assessment surveys or participating in wellness plans, Michelin is one example of a much stricter approach: workers who do not meet health standards for blood pressure, glucose, cholesterol, triglycerides, and waist sizes (under 35 inches for women and 40 inches for men) will see up to $1,000 added to their healthcare payroll withholdings.

But, while businesses are touting these programs as ‘wellness incentives,’ employee-rights defenders are skeptical.

Lew Maltby, president of the National Workrights Institute—based in Princeton, N.J.—considers these to be nothing more than reframed salary cuts bordering on ‘legal discrimination.’

“No one ever calls a bad thing what it really is,” Maltby told The Wall Street Journal.  “It means millions of people are getting their pay cut for no legitimate reason.”

The paper cited a study that foresees 6 in 10 employers imposing these sorts of penalties within the next few years.  Under current law, health-related rewards or penalties can’t exceed 20% of the cost of coverage.  And while, now, most companies tie only about 5-10% of premium payments to these incentives, those numbers are likely to change.