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August 17, 2009

Fire the Smokers! Tax the Fat?

Back in December of 2006 we blogged the story of Scott Rodrigues, a new hire of the Scotts lawn care company, who was fired after failing a drug test. No news here, perhaps, except that the drug in his system, nicotine is perfectly legal. Scott's is self-insured for health benefits, so they have a vested interest in making sure that employees follow basic wellness practices.

On his way to a pre-placement drug test, Mr. Rodrigues chewed on Nicorette gum. He was trying to kick the habit. Ironically, the Nicorette may have triggered the positive finding for nicotine. Rodrigues was hired provisionally and then abruptly terminated once the test results were released.

Rodrigues brought suit in federal court for violation of privacy and civil rights. Judge George O'Toole has ruled in favor of the company. The judge found no violation of privacy laws, as Rodrigues smoked while walking down the street and in a restaurant parking lot. His supervisor spotted a pack of cigarettes on the dashboard of his truck. Would the judge have ruled for Rodrigues if the employer had peeked through a window to see him smoking at home?

O'Toole also rejected the notion that the firing violated a 1974 federal law that protects employee rights to benefits. O'Toole ruled that Rodrigues was not yet a bona fide employee and was working on the condition that he pass the urinalysis.

Jim King, a spokesman for Scotts, said the smoking ban has never been used to fire an "existing" employee. It is used solely to screen out applicants. Since the ban went into effect in 2005, the percentage of smokers among the company's 7,000 employees has fallen to 7 percent from 28 percent.

[The Insider notes in passing that even as a "provisional" employee, Rodrigues was covered by workers comp from the moment he began working - indeed, while he was on his way to the drug testing lab.]

Whether employees can smoke or not depends upon the state they work in. A few states (e.g., Kentucky, Louisiana) explicitly protect smoker rights. Other states do not. It's interesting that Rodrigues pursued his case in federal court, probably because Massachusetts laws offered no protection to smokers.

Is Obesity Next?
We all know that smoking increases the risk of illness and the cost of medical coverage. The same goes for obesity. So the next front in the battle to control the business side of medical costs may well be the bathroom scale. The New York Times magazine profiles the Cleveland Clinic, which has been upheld as a model for medical cost control. Two years ago, they stopped hiring smokers. Delos M. Cosgrove, the heart surgeon who is the clinic’s chief executive, would like to expand the hiring ban to include applicants who are obese.

“Why is it unfair? Has anyone ever shown the law of conservation of matter doesn’t apply?” Cosgrove states that people’s weight is a reflection of how much they eat and how active they are. The country has grown fat because it’s consuming more calories and burning fewer. Our national weight problem brings huge costs, both medical and economic. Yet our anti-obesity efforts have none of the urgency of our antismoking efforts. “We should declare obesity a disease and say we’re going to help you get over it.”

Should the Cleveland Clinic - or any other employer- decline to hire obese people, it will be interesting to track the results. Where obesity can be traced back to genetic or chemical issues - where it qualifies as a disability under the Americans with Disabilities Act- employers would be guilty of discrimination. If no such causes can be specified, employers may be on solid ground. (The unaddressed issue in these hiring practices, of course, is the loss of a vast pool of talented and often essential workers.)

A recent article in Health Affairs estimated the annual cost of obesity to be $147 billion and growing. That translates into $1,250 per household, mostly in taxes and insurance premiums.

The Fat Tax
Cosgrove is interested in an idea that some economists favor: charging higher health-insurance premiums to anyone with a certain body-mass index. Call it the Fat Tax. Another alternative might be taxing the calorie-rich foods that lead to obesity: just imagine paying a little surcharge for your large order of fries, your jumbo soda and your two-for-one pizza. That would be interesting, indeed! Just as smokers pay a tax-driven premium for their cigarettes, eaters would be taxed for their food addictions.

This is simply not going to happen. To be sure, fundamental wellness is the cornerstone of any plan to contain health care costs. But when the public good collides with the rights of freedom and privacy, individual rights will win out. Policy wonks may not like it, but citizens can eat whatever they damn well please. Lighting up after that supersized meal? Well, that's one area where the public good pretty much trumps the private right.

Posted by Jon Coppelman at 11:31 AM Link to, Comment (4), or E-mail this post

I am surprised at your take on this. Where is your head at?

Insurance is a pool sharing risk. Each person in the pool pays in according to his/her risk. As actuarial science has improved so as the ability to assign costs to certain risks. The smoker should pay more for health insurance just as those coming into the pool with preexisting conditions.

Otherwise a 94 year old syphilitic, diabetic, cancer ridden alcoholic existing in the pauper ward of a public hospital in rural Mississippi would pay as much health insurance or life insurance premium as a 10 year old boy living in the suburbs of Madison Wisconsin who had all his vaccinations for the same coverage.

A fire trap in the ghetto 20 miles away from a fire department that won't answer calls in that neighborhood would pay the same fire insurance premium per dollar of value as a 100% fire proof building built next to the fire station.

The E&O premium would be the same for a known and previously convicvted crook known to be participation in another scam as for an upstanding stock broker in a firm with perfect compliance.

Of course fat people should pay higher premiums. Otherwise the whole concept of insurance deteriorates to socialism like Obama Care.

Again, where is your head at?

Posted by: Charles Read at August 17, 2009 1:31 PM

I am obese (ouch!). I should say I believe my employer is at least partially responsible for this. As a medical transcriptionist when I began here 15 years ago, our job tasks included at least some calorie-burning work, i.e. around-the-office duties, and delivering reports to hospital nursing units. Some dim bulb then decided we didn't need to move around so much & now we are trapped & must sit for our entire workday. They even have refused to purchase sensible equipment such as sit/stand stations due to "cost." This employer is a VERY large HMO; so this excuse is rather suspect. What is the responsibility of the company? They control our activities for 8hrs/day 40 days/week.

Posted by: Diane at August 17, 2009 1:53 PM

I believe that obesity is the next fur or the next smoker. There is certainly a lot of media coverage about adult and child obesity right now. I typed obesity into my google alerts and instantly it started filling up my email with the subject, as a matter of fact it's how I found this article.

Although obesity might need to become a part of the actuarial considerations for health care premiums, I think it would be a grave mistake letting the government handle health care.

Diane, I work a similar job but by my own choice and I too have had thoughts that I need to be more active but ultimately it's up to me to do something about it.

Posted by: Bobby G. Keith at August 18, 2009 1:52 AM

Cash for CHUNKERS!

That is what the president should have initiated....

Lose 100 pounds - prove it - get a check.

Check is deposited in your HSA account that would roll over so you don't go out and celebrate with more chunky monkey.

Posted by: Humor2 at August 18, 2009 11:20 AM
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