Employers are beginning to think the unthinkable.
Charging different rates for employees who are considered overweight.
This change is occurring as the nation’s percentage of overweight citizens rises dramatically.
With the increase in body mass averages, a clue to greater health problems, employees are creating a situation in which overall employer healthcare costs are rising at an unacceptable rate for many companies.
Many managers want to do something about it.
Sixty-two percent of 135 executives responding to a PricewaterhouseCoopers survey this spring said unhealthy workers such as those who smoke or are obese should pay higher benefit costs, compared with 48% in 2005.
With volunteer programs making some headway, managers are looking for more draconian answers.Sjome are starting to make overweight employees pay if they don't slim down.
Others, citing growing medical costs tied to obesity, are offering fit workers lucrative incentives that shave thousands of dollars a year off healthcare premiums.
According to the Los Angeles Times, an Indiana-based hospital chain last month said it decided on the stick rather than the carrot. Starting in 2009, Clarian Health Partners will charge employees as much as $30 every two weeks unless they meet weight, cholesterol and blood-pressure guidelines that the company deems healthy.
"At first, I was mad when I thought I would be charged $30 for being overweight," said Courtney Jackson, 28, a customer service representative at Clarian. "But when I found out it was going to be broken into segments — like just $10 for being overweight — it sounded better."
Jackson said she was going to try to slim down before the plan took effect. "If I still have weight to lose when it starts," she said, "I'll deserve to pay the $10."
As reported in the Los Angeles Times, employers are getting serious about penalizing workers "because they've run out of other options" said Joe Marlowe, senior vice president at Aon Consulting, a national benefits consulting firm.
The Los Angeles Unified School District, which has 90,000 employees, is researching financial incentives and disincentives to help bring down healthcare costs.
UnitedHealthcare, a nationwide insurer, has introduced a plan that, for a typical family, includes a $5,000 yearly deductible that can be reduced to $1,000 if an employee isn't obese and doesn't smoke.
Last summer, a similar plan was offered to county workers in Benton County, Ark. The $2,500-a-year deductible can be reduced to $500 if a worker meets low height-to-weight ratios during yearly on-site physicals. (According to federal guidelines, a man who is 6 feet tall is considered obese if he weighs 221 pounds or more. A 5-foot-6 woman is obese if she weighs more than 185 pounds.)
Thomas Dunlap, the county's benefits administrator, said the plan had witnessed a nearly 30% drop in claims — and provoked changes in the workplace.
Workers can take free weight-reduction classes and there are now regular competitions betweens departments to see who can lose the most weight.
Acknowledging that it could be partially the result of the new deductible, he noted that the county didn't have to raise its insurance premiums this year and probably won't next year.
Critics of the lose-it-or-pay trend say that companies that charge overweight employees more for their medical coverage are turning the healthcare system into a police state and, just as worrisome, are working off of a false assumption that it's easy for people who are obese and have other health issues to change their situations.
According to a 2005 Stanford University study, obese people with health coverage may already be punished on the job. Those surveyed were paid an average of $1.20 less per hour than non-obese workers, perhaps because employers intentionally adjust their wages to account for healthcare costs.
"It's reprehensible to punish and emasculate someone for having a disease like obesity," said Walter Lindstrom, director of the Obesity Law and Advocacy Center in Chula Vista, Calif. "Anyone who penalizes workers for being overweight should brace themselves for a backlash."
Lewis Maltby, president of the National Workrights Institute, a Princeton, N.J.-based employee rights group, called the trend "a very dangerous road that could lead to employers controlling everything we do in our private lives."
"To penalize for things that are beyond some people's control is just wrong," Maltby said. "Some people are fat because that's how God made them."
As the number of obese Americans continues to soar — it's now 1 in 3 — employer healthcare premiums are growing twice as fast as inflation to nearly double their cost at the beginning of the decade.
Employers have been struggling with how to hold down costs without offending or pushing away workers.
The answer may be a "carrot-and-stick" approach that gives employees one or two years to comply.