Wellness Programs: Sometimes Not Following the Program, WILL COST YOU

Companies are trying to figure out just how far they can go to keep their workers fit and healthy.

Employer wellness programs, designed to motivate employees to get in shape and address medical and lifestyle issues, have proliferated in recent years as bosses look for new ways to manage health-care costs. Nearly every major employer has some sort of initiative, many of which reward workers for their participation with discounts on insurance premiums or extra cash in their reimbursement accounts.

Those are the carrots. Sticks—adding a surcharge to premiums for those who don’t complete certain requirements, for example—are being applied as well. That’s due in part to the Affordable Care Act, which encouraged the growth of wellness programs by increasing both the maximum incentives and the maximum penalties employers may use.

The state of Maryland this week said its wellness program, required as part of insurance coverage, could bring penalties of as much as $450 per person by 2017 for those who fail to undergo certain screenings and fail to follow treatment plans for chronic conditions. The state said the program could save $4 billion over the next 10 years, according to news reports.

Workers at CVS Health Corp. CVS +1.84% who don’t complete an annual health risk assessment and health screening pay $600 more per year for their insurance premiums. CVS said the information is kept confidential by a third party and cannot be accessed by company management.

But employers are treading carefully when it comes to toughened wellness programs, lawyers and benefits executives say, as two federal lawsuits raise the volume on concerns about workers’ privacy and the border between voluntary and compulsory participation.

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