First Pennsylvania State University made employees verify that their children were in fact their own and their marriages were real to continue receiving health care benefits. Next, it announced that employees who didn’t submit to a biometric screening by fall, and annually, would have to pay a $100 monthly insurance surcharge.
So last week, when Penn State announced it was instituting a $75 monthly surcharge for smokers, and an additional $100 surcharge for coverage for spouses and domestic partners eligible for insurance through their own jobs, some faculty took it as proof that their benefits were under attack.
“Let me preface this by saying I don’t smoke and I don’t care for smoking and I’m glad there are regulations against smoking in the work place,” said Lee Samuel Finn, professor physics and astronomy at Penn State’s main campus in University Park.“But what we’re talking about here is reducing someone’s compensation because they smoke, and that’s not a whole lot different than telling someone we’re not going to hire you because we don’t like the way you live your life.”
Matthew Woessner, professor of political science at the Harrisburg campus, said he was equally outraged, and that’s it’s a slippery slope from penalizing someone for smoking to penalizing them for a much more common health problem: being overweight.
“It’s very important that people understand the larger principle involved,” he said. “Once an organization thinks it has the right to regulate legal conduct, there’s no reason to think it couldn’t levy that right to arguably a more serious health problem in America.”
Both professors also objected to the new requirement for spouses and partners, on the grounds that Penn State employees already pay extra each month to cover a spouse, plus additional charges for children, depending on income. 
And there’s no consideration as to what kind of plan the partner is being offered through his or work; consequently, he or she could be forced into a deeply inferior plan or the family could be out $100 a month, Finn said. “This is just not family-friendly.”
Penn State says the measures are necessary to help curb skyrocketing insurance costs for its self-funded system. It estimates that its health care costs will top $217 million in the coming year, and will balloon further without significant intervention.
“We are implementing a significant set of changes that will help us turn the tide on unmanageable increases in health care costs for our faculty and staff,” Penn State President Rodney Erickson said in a news release  about the plan. “Higher education is at the crossroads with respect to our responsibilities for greater cost control, and now is the time for decisive action.”
Erickson said he’d challenged Penn State’s human resources team to hold annual health care costs increases to the Consumer Price Index plus 2 percent, “a goal that will help us to sustain the existing quality of employee health care options while easing pressures on tuition increases that face our students and their families.”
In the case of tobacco use, each user on a Penn State employee’s insurance plan will pay $75 a month extra for benefits. Penn State defines “user” as anyone who has used tobacco more than five times in the three previous months. That includes cigars, cigarettes, chewing tobacco, pipe tobacco or any other tobacco product.
Both measures are self-reported. A university spokesman said it's up the individual employee to report accurate information.
"According to the Centers for Disease Control and Prevention, the use of tobacco is responsible for nearly one in five deaths in the U.S., and is the most preventable cause of death in our society,” Susan Basso, vice president for human resources, said in a separate news release  that also advertised Penn State’s free tobacco cessation programs. “We want to help our employees and their families to be as healthy as possible, and for those who use tobacco, providing them with resources to help them quit certainly will help us accomplish that goal.”
Penn State says the spousal insurance surcharge is designed to “financially encourage” spouses and domestic partners who have access to their own employers’ group health insurance to do so.
Woessner said he was particularly frustrated with this aspect of the plan, as earlier this year he and all other employees had to supply Penn State with their children’s birth certificates, marriage licenses and proof of joint property ownership with a spouse or domestic partner to prove the legal status of his insured dependents. A paperwork error between Woessner and the third-party verification agency resulted in the cancellation of his policy for several months. He was able to join his wife’s insurance in the interim, he said. Now, just as he is re-enrolling in Penn State’s insurance, he is being charged for covering his wife.
A university spokesman said the verification process was part of the overall plan to lower insurance costs for everyone.
But by requiring so much of employees to ensure continued coverage at the basic rate, Woessner said, "it looks as though they're levying heavy increases on select groups of faculty and staff that don't meet Penn State's idyllic criteria.... We all have to grapple with rising health care costs but how we deal with those challenges says a lot about our values."
Punishment Over Rewards
News of the policy changes followed Penn State’s announcement earlier this month of the “Take Care of Your Health Plan.”  Under that initiative, employees and their spouses or domestic partners covered by university health care must complete an online wellness profile and physical exam by November. They’re also required to complete a more invasive biometric screening, including a “full lipid profile” and glucose, body mass index and waist circumference measurements. Mobile units from the university’s insurance provider, Highmark, will visit campuses to perform these screenings. The university says it’s a wellness promotion program, and that medical information will not be shared with anyone or used for any other purpose.
Just a small minority of Penn State employees are affiliated with the Teamsters union, and they are not affected by the changes. The vast majority of Penn State employees, including the entire faculty – who are not unionized – will be subject to the new regulations in January.
Finn said many faculty are upset with the policy changes, and that he suspects the timing of the announcements – in July, when lots of faculty members are away – was intended to minimize their impact.
Wellness promotion programs are a growing focus in higher education management, according to Inside Higher Ed's 2012 Survey of College and University Human Resources Officers.  Given a list of issues and asked whether they were paying more or less attention to them than they were five years earlier, more respondents (43.4 percent) said they were giving more attention to offering or promoting wellness programs than was true for any other issue. And 73.7 percent agreed that their institution should offer wellness policies that "reward real outcomes" (weight loss, quitting smoking, etc.) rather than just participation in these programs.
But in higher education, wellness programs are still offered overwhelmingly on a voluntary basis. Penn State has had various voluntary initiatives  for some time, including Weight Watchers and personal nutrition coaching, but they made little difference in bringing down health care costs, according to information from the university.
However disagreeable to faculty, experts said, Penn State's negative incentive model likely is a prominent example of a growing trend in business that will continue to creep into higher education, as state and federal governments exert more pressure to control costs and provide access to more students. Additionally, the Affordable Care Act raised the maximum levels of differential contributions toward health insurance based on participation in wellness programs. Maximum rewards or penalties are now capped  at 30 percent of the total cost of coverage, including both employer and employee contributions, up from 20 percent – except for tobacco, with a maximum differential now at 50 percent.
Indeed, the University of Pennsylvania Health System, or "Penn Medicine," announced earlier this year that it would no longer hire smokers. The controversial policy  -- which has been outlawed in dozens of other states as discriminatory -- followed an earlier $15 biweekly insurance surcharge for smokers.
“Many private sector employees charge a higher health insurance rate for smokers,” said Andy Brantley, president and CEO of the College and University Professional Association for Human Resources, in an e-mail. “While this is a relatively new strategy for higher ed, it is not a new strategy in the private sector.”
While subsidized health care for children and spouses is a tradition in higher education that “should continue,” Brantley said, “As funds for benefits continue to be limited and more closely scrutinized, employers must evaluate how much funding can be dedicated to this coverage -- particularly when the spouse is eligible for health insurance coverage through his or her employer.”
Still, health care incentive experts said this policy is still rare, even in the private sector.
But both issues are part of a larger philosophical question institutions must face, said Frank Casagrande of Casagrande Consulting: whether "everybody pays more or some somebody pays more." The firm helps higher education officials, among others, with health care and other management issues.