CHICAGO — Whirlpool Corp.'s suspension of 39 production workers at an Indiana plant who were seen smoking after declaring themselves eligible for a $500 annual tobacco-free insurance discount may signal the end of the honor system that rules most corporate wellness programs, experts say.
The action also underscores the difficulty of enforcing so-called voluntary programs when fines or incentives grow big enough to encourage cheating and snitching, they say.
"Employers have been using the honor system ever since wellness programs started, and you have to be a little naive to think that people are going to admit they smoke when they know they're going to be penalized," said Lewis Maltby, president of the non-profit National Workrights Institute in Princeton, N.J. "Sooner or later, employers are bound to start checking up. This may be the beginning of the trend."
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The workers were suspended after they were seen continuing to smoke in designated locations outside the Evansville plant despite enrolling for health insurance in October as non-smokers, avoiding the penalty.
"The company routinely asks employees to confirm their status as a tobacco user or a non-tobacco user as part of the annual benefits enrollment process," Whirlpool said in a statement, adding that the company "investigates" when there appears to be a discrepancy between their enrollment status and their behavior.
"Falsifying company documents is a serious offense," the company said. "Those found to have done so are subject to disciplinary action, which could include suspension and termination."
About the suspended workers, the company said: "The investigation into this situation is ongoing. Out of respect for the process and Whirlpool employees, the company has no further comment at this time."
Whirlpool has offered lower premiums to non-smokers since 1996.
The Michigan-based company employs about 1,400 people at the refrigerator manufacturing plant, including production workers represented by Local 808 IUE-CWA (International Union of Electronic, Electrical, Salaried, Machine and Furniture Workers-Communication Workers of America).
Local 808 filed a grievance about the smoker penalty several years ago and won an arbitration. Whirlpool went to court to set aside the ruling, and the dispute was resolved in an undisclosed legal settlement in March. The case remains sealed.
A Local 808 representative declined comment about Monday's suspensions, which necessitated recalling workers who had been laid off in order to keep the plant running.
Web sites buzzed with the news, and comments reflected the controversy that surrounds employer efforts to influence workers' personal behaviors, as well as growing intolerance for smokers.
According to a 2007 survey of employer-sponsored health plans by consulting firm Mercer, 16 percent of large employers vary employee premiums based on smoking status. Among small and midsized employers, 5 percent vary premiums.
Get-tough regimes raise a host of legal as well as ethical issues. Employers are allowed to offer incentives or fines as part of voluntary wellness programs as long as the amount is not more than 20 percent of employees' total cost of insurance, according to federal guidelines that went into effect in January for calendar-year plans.
When the amount becomes meaningful, Maltby and others said, enforcement becomes an issue.
"This is the first instance I've seen where people said they didn't smoke so they wouldn't get hit with the penalty and then got caught and punished," Maltby said. "My sense is, most employers are still using the honor system" and not checking up.
But he added: "Employers didn't set up the penalty just for the fun of it. They set up penalties because they intend to enforce it. This is a very heavy-handed way to help people get healthy and cut medical costs."