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CVS: Use of Rewards and Penalties for Improving Employee Health on the Rise

Thursday, Mar. 28, 2013

Monday, Aon Hewitt released a survey of 800 companies on the use of incentives for employee participation in programs aimed at improving employee health, with the hope of lowering company medical costs. The study found that 79% of companies offer rewards for participating in programs (e.g. completing a health risk questionnaire or biometric screenings); 5% utilize punishments for not participating (CVS Caremark requires a $600 fee for employees who do not report their weight, blood sugar, and cholesterol); and 16% use a mix of both. Proponents of the use of incentives, such as CVS Caremark, point to an overall blood sugar and cholesterol level decrease, and the reality that "Like it or not, in this country, employment and health insurance and health care are all intimately related." Detractors worry that incentive programs reward already healthy employees while singling out workers most in need of affordable health care with higher costs. Are these programs an invasion of personal privacy or unfairly manipulative?

  Kirk: We accept auto insurance that is more expensive if one has speeding tickets or past accidents, or if one is very young. This is no different, though I think programs should always be structured as rewards or discounts for good health behaviors, not penalties. Let’s face it; good health is good for the employee and good for the company. Get over it!

  Patrick: I’m all for looking at this through a consequentialist lens—improving employee health is good in itself and the bottom line—but the manner in which these programs are administered makes all the difference. Some guidelines companies should follow are employees must consent before being asked personal medical information and the results of questionnaires and tests must be kept confidential.

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Aon Hewitt Survey

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