New Version of Workplace Wellness Programs: Carrot or Stick?

By Kelley Weiss, CHCF Center for Health Reporting

Kimberley Macgregor, a bookkeeper at a Burbank Ralphs, looks over which “healthy activities” she’ll do to offset her health care costs. She says she didn’t know about the new wellness program until KQED contacted her. (Photo: Kelley Weiss)


Kimberley Macgregor, a bookkeeper at a Burbank Ralphs, looks over which “healthy activities” she’ll do to offset her health care costs. She says she didn’t know about the new wellness program until KQED contacted her. (Photo: Kelley Weiss, CHCF Center for Health Reporting)

Kimberley Macgregor, a bookkeeper at a Ralphs in Burbank, says it’s almost impossible to stay up to date on her health benefits.

She flips through a glossy pamphlet which features an array of fruits and vegetables and a woman meditating. It explains her company’s wellness program.

Macgregor is debating over which of the seven “healthy activities” in the wellness program to choose. She says she’ll opt for a biometric screening that uses a blood sample to check things like cholesterol and blood pressure.

“All and all it’s good for you because it gives you awareness of where you stand when it comes to health issues,” Macgregor says. “Maybe it can catch diseases early so that you have enough time to change it.”

If employees don’t participate in the disease management program their deductible goes up by $500.
Macgregor says she didn’t know everything about the changes to the program this year until I contacted her — and she’s her union’s representative in the Ralph’s where she works. If she doesn’t participate in the program, she’s on the hook for more money.

This year Ralphs is giving Macgregor $375 dollars less to offset her health care costs. But if she does four of the seven “healthy activities” she can earn it back.

Macgregor will then only have to pay $250 dollars towards her $1000 health insurance deductible. But she finds the whole thing a bit creepy.

“Your health is not between your doctor and you anymore,” she says. “You might as well invite the insurance company to sit in that little chair to the right and you might as well invite the company that you work for to stand in the corner and just be in the room with you with your doctor.”

She says she understands that health care costs are skyrocketing, so for businesses it all comes down to the bottom line: saving money.

Kathy Finn is a negotiator with the Southern California branch of the United Food and Commercial Workers. The union negotiates health benefits for more than 100,000 people. She says that employers initially proposed wellness programs to achieve what they call cost containment.

In its latest contract with Ralphs, Vons and Albertsons, Finn says the union agreed to expand the wellness program. She says otherwise workers would have had to pay more or get fewer benefits.

At first glance she says the wellness program looks great because workers can earn $150 for each activity.

“But in my opinion it’s kind of like it’s a stick masquerading as a carrot,” Finn says. “If you compare it to what we had just in our last contract, we took something away and we’re forcing you to earn it back.”

She points to the new chronic disease management program. A third party combs through claims data and flags employees with severe cases of diabetes, heart disease or asthma. Finn says it’s about 4,000 people. They then offer them a personal nurse and discounts on prescription drug costs. But, it’s still a hard sell.

“It’d be great if we could get everyone to participate,” Finn says. “But from the get-go we know that not everyone is going to participate.”

If employees don’t participate in the disease management program their deductible goes up by $500. Finn says even using this stick, less than a third of people have enrolled. She believes that a lot of the grocery workers will just stop going to the doctor.

That worries the executive director of the consumer advocacy group Health Access California, Anthony Wright. He’s a huge cheerleader for the Affordable Care Act because he says it gives people better access to health care.

President Obama’s health care law also allows businesses to use wellness programs to financially penalize workers for not losing weight or lowering their cholesterol. That, Wright believes, undermines the very foundation of the law.

“Some efforts to encourage worksite wellness being tied to either premiums or cost sharing in health insurance provides the insurers a back door opportunity for making distinctions between healthier and unhealthier people which is what we’re trying to get away from in the Affordable Care Act,” Wright says.

Ralphs’ parent company Kroger and the California Grocers Association did not respond to repeated requests for comments.

A survey shows more than half of large businesses are considering adopting wellness plans with financial penalties in coming years.

That sounds about right to union negotiators like Kathy Finn. She says the one thing that’s clear about wellness programs is that they’re about saving companies money. If workers get healthier as a result, she says that’s a bonus.

This story was produced in collaboration with the California HealthCare Foundation Center for Health Reporting, a nonprofit news organization that focuses on California health issues. Based at the USC Annenberg School for Communication and Journalism, the center is funded by the nonpartisan California HealthCare Foundation.

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