Unhealthy lifestyles targeted as health-care costs soar
Employers tried the carrot, then a small stick. Now they are turning to bigger cudgels.
For years they encouraged workers to improve their health and productivity with free screenings, discounted gym memberships, and gift cards to lose weight. More recently, a small number charged smokers slightly higher premiums to get them to quit.
Results for these plans were lacklustre, and health-care costs continued to soar. So firms are taking advantage of new rules under President Barack Obama's health-care overhaul to punish smokers and the overweight.
Some will even force employees to meet weight goals, quit smoking and provide very personal information, or pay up to thousands more annually for health care. That could disproportionately affect the poor, who are more likely to smoke and can't afford the higher fees.
Nearly 40 per cent of large US companies will use surcharges in 2014, such as higher insurance premiums or deductibles for individuals who do not complete company-set health goals, according to a survey of 892 employers released in September by human resources consultancy Towers Watson, and the National Business Group on Health, which represents large employers.
That is almost twice as many as the last time they did the survey in 2011, when only 19 per cent of companies had such penalties. The number is expected to climb to two-thirds of employers by 2015.
Employers are getting much more aggressive about punishing workers who are overweight or have high cholesterol.
A study released last week by the Obesity Action Coalition, an advocacy group, covered workers at more than 5,000 companies who must participate in their employer wellness programmes to receive full health benefits. Sixty-seven per cent also had to meet a weight-related health goal such as a certain body mass index.
Almost 60 per cent of these workers received no coverage that paid for fitness training, dietitian counselling, obesity drugs, or bariatric surgery to help achieve a body mass index under 25, which is considered healthy.
"Weight requirements are an effective way to make it harder for people with obesity to qualify for full health coverage," said Ted Kyle, the study's lead author and founder of Conscienhealth, a Pittsburgh-based firm that advises other companies on obesity programmes. "Some programmes can verge on discrimination," he said.
Next year many more firms plan to penalise workers who use nicotine because of their much higher health-care costs. Proctor & Gamble, the household-product giant, will begin charging such employees an additional US$25 per month in 2014 until they have completed a company-paid cessation programme.
State employees in Wisconsin and Washington State will pay as much as US$600 more per year, while non-union smokers at United Parcel Service will pay as much as US$1,800.
"We found that while fewer than 10 per cent of workers at large employers smoke, their impact to health-care costs is disproportionately huge," said LuAnn Heinen, vice-president for the National Business Group on Health. "Helping them quit - however you do that - has the most obvious near-term pay-off in terms of savings and productivity gains."