Using Cash Bonuses and Penalties To Enhance Weight Loss In Obese Employees

Employers penalize obesity
By Daniel Costello
Baltimore Sun. July 29, 2007




This article reports on an increasing number of employers using monetary incentives or disincentives to promote dieting and exercise among overweight employees with the goal of improving the employees’ health and, consequently, lowering medical costs secondary to obesity-related health problems.

Some employers penalize overweight employees if they don’t slim down while others offer fit workers lucrative incentives that may decrease their healthcare premiums by thousands of dollars a year. Examples include

• Clarian Health Partners, an Indiana-based hospital chain, will, beginning in 2009, charge employees up to $30 every two weeks unless they meet weight, cholesterol and blood pressure guidelines the company deems healthy, i.e., employees’ pay will be docked if they fail to meet certain weight ratios, cholesterol, blood pressure or if they smoke.
• UnitedHealthcare, a national insurer, introduced a plan this month 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.
• County workers in Benton County, Ark., were offered, beginning last summer, a similar plan. The $2,500-a-year deductible can be reduced to $500 if a worker meets low height/weight ratios during yearly on-site physicals. Thomas Dunlap, Benton County’s benefits administrator, said the plan had witnessed a nearly 30 percent drop in claims - and led to changes in the workplace. Workers can attend free weight-reduction classes, and there are now regular competitions between 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 likely won’t next year.

Some criticize this tactic, claiming that the lose-weight-or-pay plans “turn the health care system into a police state.” In addition, implicit in the strategy is the notion that people who are obese and have other health issues and change their situations with reasonable effort.

Lewis Maltby, president of the National Workrights Institute, a Princeton, N.J.-based employees rights group, called the trend

Employers reply that they are only responding to the rise in both health care premiums and the proportion of obese Americans.

In a telling statistical change, 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 percent who said so in 2005.

Further, in January 2007, the U.S. Department of Labor released final clarifications on the Health Insurance Portability and Accountability Act (HIPAA) of 1996, which ruled that employers can use financial incentives in wellness programs to motivate workers to get healthy. Nonetheless, some lawyers say weight-based compensation plans might run afoul of other employment laws such as the Americans with Disabilities Act.

In recent years, companies have offered cash, merchandise and gift cards to those who lose weight or lower their blood pressure. A few have begun refusing to hire workers who smoke. The new plans are different because employers are demanding that workers participate in health exams and have their weight checked and blood taken to screen for high cholesterol or blood sugar.

Commentary

The use of mandatory monetary penalties and/or bonuses to direct lifestyle changes in the name of better health, especially when “better health” is a proxy for “lower costs,” is intriguing on several levels.

First, of course, is the question of the efficacy and efficiency of such tactics.

The ethical questions already suggested extend beyond the employers-employees contracts. Governmental agencies currently pass laws regulating the use of tobacco, alcohol, and, most recently, high-fat foods. It is hardly inconceivable that medical care provided by the state might someday come at a higher price to those citizens whose habits are deemed unhealthy.

Other, more specific issues are present in abundance. Which healthcare habits are fair game for bonuses and penalties? Should those with hereditary disorders be expected to pay more? How about those with a genetic predisposition to obesity? Are those who fall below the weight norms to be penalized? Or those who do not make it to follow-up clinical appointments? Or those who choose to see a priest for healing rather than a physician? Who sets the standards for healthy behavior? If a pregnant worker doesn’t seek adequate pre-natal care but is healthy and bears healthy children, is that family assessed extra costs? If a 32 year old former college athlete turned company VP plays in a semipro football league with its attendant risk of injury, should his behavior be considered unhealthy and efforts made to change it? What if he sky-dives on weekends? How about if his moonlighting job is serving as guinea pig for testing medication?

It’s a tricky new world.

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