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You smoke, you’re fired! Lessons from the Whirlpool Case

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in Discrimination and Harassment,Employee Benefits Program,Employment Law,HR Management,Human Resources

The dangers of smoking are well documented: heart disease and cancer, shorter life expectancy, higher health care expenses. Now add another risk: As workers in Indiana just found out, smoking could get you fired. Was their employer justified in taking action, or did it step into a legal quagmire?

Whirlpool Corp., in Evansville, Ind., two weeks ago suspended 39 employees who had signed insurance documents attesting they didn’t use tobacco.

The company had given them discounts on their health insurance premiums because nonsmokers are healthier than smokers—and thus have lower health care and insurance costs.

Whirlpool was eager to pass on the savings as an incentive for employees to abstain from smoking.

Only trouble was, Whirlpool officials spotted the 39 lighting up on company premises. The employees were suspended without pay pending fact-finding hearings that will determine whether they will keep their jobs.

Officially, the reason for the suspensions wasn’t smoking—it was lying to the company about whether they smoked.

Incentives … and penalties

Employment law attorney Matt Effland, a member of HR Specialist’s Employment Lawyer Network and a shareholder in Ogletree Deakins’ Indianapolis office, believes employers contemplating similar discipline should tread carefully. They risk running afoul of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which governs workplace wellness programs.

“While new HIPAA guidelines permit employers to offer incentives to employees to encourage a healthy lifestyle, they forbid penalizing employees who choose to avoid such lifestyles,” Effland said.

Federal law and smoking

HIPAA prohibits employers from discriminating against employees based on their health condition when determining benefit premiums or contributions. HIPAA makes an exception for “wellness programs,” in which employers can offer incentives or provide education to smokers to help them change their behavior.

Smoking cessation classes are one of the most popular health incentive plans.

Wellness-program rewards must be available to all similarly situated individuals within a company. Under HIPAA, that means employees who have an unreasonably difficult time meeting the program’s standard must have an alternative reward available. Employers may ask for medical certification of the employee’s condition to verify that the program’s standards are indeed unreasonably difficult for the employee to attain.

In the case of a program designed to help smokers quit, for example, employees who can document a nicotine addiction could gain the reward by agreeing to wear a nicotine patch or by attending smoking cessation classes.

Ask an attorney

For employers considering health incentives like the one Whirlpool offers, Effland recommends seeking legal advice. “A company that is considering a plan that offers an incentive in their health plan should make sure to do so in conjunction with employment and benefits counsel,” he said.

According to Effland, employers need to consider the following questions in addition to HIPAA pitfalls:

  • Are there state laws affecting employer restrictions on employee behavior? Several states specifically prohibit discrimination against tobacco users.
  • Do health incentives run the risk of setting up policies that might discriminate under the ADA?
  • Is it really practical to enforce health incentives?

Whirlpool apparently believes it is. “If your company is not prepared to act,” Effland said, “what is the purpose of putting the policy in place?”

Resources: Click here for more on HIPAA compliance and wellness programs. Official guidance from the U.S. Department of Labor is available here.

Final note: Fairness is the watchword. Whatever initiatives employers try, they must uniformly enforce all rules. Targeting women, minorities, workers over age 40 or the disabled could run afoul of several federal anti-discrimination laws.

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