Employers making workers pay the price for being obese

CINCINNATI -- First they tried nudging. Now companies are penalizing workers who have high health risks such as obesity and high blood pressure or cholesterol as insurance costs climb.

A small number of companies have linked health factors to what employees pay for benefits, but the practice is expected to grow now that some federal rules have been approved, spelling out what's allowed by law. Employee advocates worry that anti-bias laws such as the Americans with Disabilities Act won't cover the person who is 20 or 30 pounds overweight.

The businesses are deducting from employees' paychecks, adding insurance surcharges or offering insurance discounts or rebates only to low-risk workers.

"Employers know they have to do something," said Garry Mathiason, a senior partner at the national employment and labor law firm Littler Mendelson, based in Boston. "I believe that in just the next two years more employers will turn to penalties to change employee behavior."

Mathiason said more than 300 companies have sought advice on creating more aggressive wellness programs since the firm released a study in April on legal issues and trends associated with requiring healthy practices.

Health care spending in the United States is estimated to reach $2.2 trillion this year, with at least 54 percent of spending in the private sector, and is expected to nearly double by 2016, according to the National Coalition on Health Care.

A 2003-04 National Health and Nutrition Examination Survey showed about two-thirds of adults in the United States were overweight and almost one-third were obese. A U.S. surgeon general's report said health care costs of obesity totaled more than $117 billion in 2000.

More employers have charged higher insurance premiums the past few years for employees who use tobacco. Otherwise, wellness programs had been primarily voluntary, offering in-house fitness centers and free health screenings, for instance.

But many employees of Clar-ian Health, based in Indianapolis, didn't use the programs, hospital spokesman James Wide said.

In 2009, the company will start reducing pay for employees in its health plan by $10 per check if their BMI, a measurement of body fat through a height and weight ratio, is in the obese range of more than 29.9. The deduction will be $5 per check if they don't meet cholesterol, blood pressure or blood glucose measurements. Workers will be required to complete an annual health risk assessment and can appeal to have their fees dropped if they show improvement.

"We want more people to participate so that they can take control of their health," Wide said.

'Weeding out' costly employees

Some workers and employee advocates say companies are intruding in workers' lives.

The National Workrights Institute says employers adopting the charges are trying to control private behavior and amassing huge amounts of personal health information.

"It's a backdoor approach to weeding out expensive employees," legal director Jeremy Gruber said.

Employers wary of risking legal problems feel more confident after federal regulations were released July 1 covering how wellness programs can comply with nondiscrimination rules under the Health Insurance Portability and Accountability Act.

Rewards (and thus penalties) based on health factors cannot exceed 20 percent of the total cost of employee health coverage.

Employers are warned that they must consider other federal and state laws, including the ADA.

Businesses acknowledge they are trying to cut health care costs but say they also want to help employees get healthier. Companies determine what qualifies as high risk for their staff.