In an effort to control the significant rise in their health care costs in recent years, many employers are trying to regulate the off-duty behavior of their employees when they believe it creates health risks. However,these employers may be overstepping the boundaries of individual privacy, according to law firm Pepper Hamilton.
"For example, more employers are contending that the health insurance claims of smokers and overweight workers are higher than those for non-smokers and non-overweight employees. In response to these higher costs, more employers are instituting bans on hiring smokers, even if they only smoke during off-duty hours, and/or charging more for health insurance to smokers, overweight workers, and other categories of employees," said Susan Lessack, a partner with Pepper Hamilton.
Do employers have free reign to monitor and make decisions based on the off-duty conduct of their employees? "If they are in one of the states that have a 'lifestyle' statute, they may be prohibited from doing so. In a state without a lifestyle statute, employers have more freedom to take action based on off-duty conduct. This is particularly true where employers have job-related reasons for their actions, such as when there is a connection between employees' personal habits and their workplace effectiveness,' said Lessack.
In addition to the privacy concerns implicated by these practices, the risk exists that smokers or obese employees who are treated adversely might have viable claims for disabilities, or perceived disability discrimination. At the federal level, the Americans with Disabilities Act (ADA) prohibits employment discrimination against people with "any physical or mental impairment that substantially limits one or more of an individuals major life activities," and also people who are "regarded as having such an impairment."
Lessack said smokers who are fired for smoking could claim they are addicted to nicotine, and that their addictions constitute disabilities. Or, morbidly obese employees could claim they are disabled because they are substantially impaired in walking. Employers who fire workers because they smoke or are obese could be vulnerable to claims for disability discrimination.
Instead of refusing to hire or deciding to discharge employees whose lifestyles result in increased health care costs, some employers are adopting the option of establishing "wellness programs," said Lessack. Wellness programs provide a means to cut health care costs without interfering with employees' employment relationship. Although the Health Insurance Portability and Accountability Act of 1996 (HIPAA) generally prohibits employers from discriminating on the basis of an employees health condition in determining benefit premiums and contributions, it makes an exception for "wellness programs."
Some employers have imposed higher health insurance premiums on smokers and overweight employees based on the view that they incur higher health care costs, and that requiring them to pay a greater portion of those costs is simply a fair distribution of their expenses. Another approach offers discounts to employees who participate in smoking cessation or "healthy eating" programs. To qualify under the wellness program exception, an employers program must meet certain specified requirements. Among those is the requirement to offer an alternative to those employees who, for medical reasons, cannot meet the program goals. For instance, if a smoker's physician certifies that an employee has been unable to stop smoking because of his or her addiction to nicotine, the employer must offer a reasonable alternative, such as a smoking cessation program or nicotine patch.
"Whether legal or not, employers efforts to affect changes in employees' personal lifestyles can, at a minimum, lead to an unhappy or under-performing workforce, and to the loss of talented employees who are uncomfortable with an employer's scrutiny of their personal lives," said Lessack. "The issues surrounding the impact of off-duty conduct on employment-related decisions will continue to be debated as employers struggle to balance the need to run their businesses effectively and economically with the desire to be viewed as a positive place to work."