How your company is watching your waistline

Reuters

By Kathleen Kingsbury

Nov 13 (Reuters) - Employers tried the carrot, then a smallstick. Now they are turning to bigger cudgels.

For years they encouraged workers to improve their healthand productivity with free screenings, discounted gymmemberships and gift cards to lose weight. More recently, asmall number charged smokers slightly higher premiums to getthem to quit.

Results for these plans were lackluster, and healthcarecosts continued to soar. So companies are taking advantage ofnew rules under President Barack Obama's healthcare overhaul in2014 to punish smokers and overweight workers.

Some will even force employees to meet weight goals, quitsmoking and provide very personal information or pay up tothousands more annually for healthcare. That coulddisproportionately affect the poor, who are more likely to smokeand can't afford the higher fees.

Nearly 40 percent of large U.S. companies will usesurcharges in 2014, such as higher insurance premiums ordeductibles for individuals who do not complete company-sethealth goals, according to a survey of 892 employers released inSeptember by human resources consultancy Towers Watson andNational Business Group on Health, which represents largeemployers.

That is almost twice as many as the last time they did thesurvey in 2011, when only 19 percent of companies had suchpenalties. The number is expected to climb to two-thirds ofemployers by 2015.

Employers are getting much more aggressive about punishingworkers who are overweight or have high cholesterol. A studyreleased on Wednesday by the Obesity Action Coalition, anadvocacy group, covered workers at more than 5,000 companies whomust participate in their employer wellness programs to receivefull health benefits. Sixty-seven percent also had to meet aweight-related health goal such as a certain body mass index.

Almost 60 percent of these workers received no coverage thatpaid for fitness training, dietitian counseling, obesity drugsor bariatric surgery to help achieve a body mass index under 25,which is considered healthy.

"Weight requirements are an effective way to make it harderfor people with obesity to qualify for full health coverage,"said Ted Kyle, the study's lead author and founder ofConscienhealth, a Pittsburgh-based company that advises othercompanies on obesity programs.

"Some programs can verge on discrimination," he said.

PENALTIES HIT SMOKERS HARDEST

Next year many more companies plan to penalize workers whouse nicotine because of their much higher healthcare costs.Proctor & Gamble Co, the Cincinnati-basedhousehold-product giant, will begin charging such employees anadditional $25 per month in 2014 until they have completed acompany-paid cessation program.

Under similar provisions, state employees in Wisconsin andWashington State will pay as much as $600 more per year, whilenonunion smokers at United Parcel Service Inc will payas much as $1,800.

"We found that while less than 10 percent of workers atlarge employers smoke, their impact to healthcare costs isdisproportionately huge," said LuAnn Heinen, vice president forthe National Business Group on Health. "Helping them quit -however you do that - has the most obvious near-term payoff interms of savings and productivity gains."

A recent Ohio State University study found that businessespay nearly $6,000 more annually per employee who smokes comparedwith a nonsmoker. Other research suggests that less than 16percent of employees participate in voluntary smoking cessationprograms, Heinen added.

A.H. Belo, owner of the Dallas Morning News, ProvidenceJournal and other publications, told staff in September that for2014 it would require employees and their spouses to complete abiometric health screening or face a $100 annual surcharge. In2015, employees will be asked not only to undergo the screeningbut to meet three out of five as yet unspecified health goals toavoid the additional fee.

COSTLY PUNISHMENTS

Under Obama's Affordable Care Act, which takes effect inJanuary, companies can offer a reward of up to 30 percent ofhealthcare costs paid by the employee to those who completevoluntary programs like smoking cessation, a risk assessment orbiometric tests like waist measurement.

The financial incentives could add up to about $1,620annually per worker. But if wellness programs don't end upsaving costs, companies can raise premiums across the board orslap them on workers who don't get with the programs. In somestates, tobacco users who sign up for insurance through the newstate health exchanges could be charged 50 percent higherpremiums than nonsmokers.

Research suggests savings may be harder to achieve whenprograms are voluntary than has often been thought. A reportreleased in May by the RAND Corp found workers who participatedin a wellness program had healthcare costs averaging $2.38 lessper month than nonparticipants in the first year of the programand $3.46 less in the fifth year.

Some health and labor experts are concerned that penaltiesmay be unduly harsh, especially for low-wage workers and thosewho have health conditions beyond their control. According tothe Centers for Disease Control and Prevention, 29 percent ofadults with incomes below the federal poverty level smoke,compared with 18 percent of those above the poverty level.

Mark Rothstein, a lawyer and bioethics professor at theUniversity of Louisville School of Medicine, chooses to pay ahigher annual premium rather than complete a healthquestionnaire for his employer, calling it a "privacy tax."Lower-paid colleagues, he said, "don't have the same luxury toopt out."

Fierce resistance forced Pennsylvania State University inSeptember to abandon a plan to charge employees $100 per monthif they did not participate in various health screenings andfill out a detailed health questionnaire administered by WebMD,which asked among other things whether a worker had recentlydriven after drinking too much, whether female employees plannedto become pregnant in the next year and how frequently maleworkers performed testicular self-exams. This led to an outcryover privacy concerns and the potential for hacking of computerdatabases.

"These were just things no employer has the right to ask,"says Brian Curran, a professor of art history at Penn State whostarted an online petition to protest the questionnaire.

University officials had argued the penalty was needed totamp down healthcare costs and avoid tuition hikes. In Januaryit still plans to implement a $100-a-month surcharge for spousesand a $75-a-month penalty on tobacco users.

Courts so far have shown little resistance to such programs.The 1996 Health Insurance Portability and Accountability Act(HIPAA) prohibits workers who are in a group health insuranceplan from being discriminated against on the basis of health,and Obamacare extends that right to individuals. But neitherbans penalties outright.

The law does specify that wellness programs must bevoluntary, but Lewis Maltby, president of the NationalWorkrights Institute, a legal advocacy organization, says thatcan be a slippery slope. Most employees don't feel like theyhave a choice, Maltby says. "In today's job market, anyreasonable request by one's employer is essentially read as ademand."

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