Labor & Employment Law

Companies move from incentives to penalties regarding wellness plans, but is it legal?

More companies are penalizing employees who don’t meet wellness requirements, the Wall Street Journal (sub. req.) reports.

CVS Caremark, for instance, recently stated that employees who did not report their weight, body fat and cholesterol levels to the company’s benefit firm would be fined $600, the Wall Street Journal reports. And at Michelin North America, employees with high cholesterol, or a waist size above a certain level, could see their health coverage costs increase by $1,000 in 2014.

The Wall Street Journal notes that offering employees incentives for good health often doesn’t produce results. However, employment and medical specialists say penalties for things like weight are often discriminatory.

Human rights attorney Lew Maltby, told the Wall Street Journal that these penalties amount to “legal discrimination.” Maltby, who is president of Princeton, N.J.-based National Workrights Institute told the Wall Street Journal that no one ever calls a bad thing what it is. “It means millions of people are getting their pay cut for no legitimate reason.”

Detroit labor and employment lawyer John Hancock told the Wall Street Journal that employers can use health-related rewards or penalties as long as those rewards or penalties don’t exceed 20 percent of an individual’s health care coverage. Hancock also told the newspaper than an employee can’t legally dock workers’ pay for health issues but can tie their health care bills to whether they meet or miss health goals. As long as companies make exceptions for those with conditions that keep them from meeting health goals, they are acting within the law.

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