It’s tough to stop smoking, so wellness programs are being encouraged to give smokers a second chance to stub out their last cigarette.
Smokers are often the target of wellness plans. In fact, the most common form of outcome-based incentives in wellness plans is awarded for smoking cessation, according to a 2010 survey by National Business Group on Health and Towers Watson. The survey found that 25 percent of responding employers offered a financial incentive for employees to quit smoking.
Only 4 percent offered financial incentives for maintaining a body-mass index within target levels, and even fewer respondents did so for maintaining blood pressure or cholesterol within target levels—3 percent for each category.
‘Cycle of Failure’
Smoking is taken more seriously, but plan sponsors have to be realistic, since it usually takes a smoker more than one attempt to buck the habit for good. As noted in the U.S. departments of Health and Human Services, Labor and Treasury’s final rule on employment-based wellness programs, effective Jan. 1, 2014, “Overcoming an addiction sometimes requires a cycle of failure and renewed effort.”
So even a wellness plan with an outcome-based standard that an individual not use tobacco should have a reasonable alternative in the first year, such as that he or she participate in an educational seminar. A worker who continues to smoke but attends the seminar still would be entitled to the wellness plan’s reward, the agencies said.
In the second year the plan might have a different reasonable alternative standard, such as complying with a recommendation from the individual’s personal physician or trying a new nicotine-replacement therapy. Smokers who satisfied that standard would qualify for the reward.
Premium differentials often are based on tobacco use and determined with a health-risk assessment. Smokers may have to pay surcharges in addition to regular premiums.
The departments noted that in plan materials during open enrollment, the plan sponsor might explain the tobacco premium differential by saying, “Stop smoking today! We can help! If you are a smoker, we offer a smoking-cessation program. If you complete the program, you can avoid this surcharge.”
The program should be held at a time and place that are not unreasonably burdensome or impractical for participants and should inform smokers that they may involve their personal physician. The employer pays for the smoking-cessation program, even if the worker keeps smoking.
A wellness plan can require a smoker to complete the program again in order to avoid the surcharge in a subsequent year.
Suppose a plan sponsor’s annual premium for employee-only coverage is $6,000—$4,500 per year covered by the employer and $1,500 by the employee. Workers receive $600 for complying with a health-contingent wellness program. The plan also imposes a $2,000 premium surcharge on employees who have used tobacco in the past 12 months and who are not in the plan’s tobacco-cessation program. Those who are enrolled are not assessed the surcharge.
In this example, the total of all rewards—$2,600—is not 50 percent of the total annual cost of employee-only coverage, which is $3,000, so it does not exceed the maximum permissible reward or penalty. And the $600 reward, on its own, does not exceed 30 percent of the total annual cost of employee-only coverage.
Smoking-related diseases include asthma, cancer, chronic obstructive pulmonary disease, diabetes, heart disease and stroke. According to the Centers for Disease Control and Prevention (CDC), the following percentages of Americans smoke: 31.4 percent of American Indians and Alaska Natives, 25.9 percent of multiple races, 21 percent of whites, 20.6 percent of blacks, 12.5 percent of Hispanics and 9.2 percent of Asian Americans.
On May 22, 2013, the CDC launched a campaign to encourage smokers to talk with their doctor to help them quit. A doctor’s advice and assistance more than doubles the odds that a smoker will quit, according to the CDC.
Allen Smith, J.D., is the manager of workplace law content for SHRM. Follow him @SHRMlegaleditor.