Since employer-sponsored health insurance programs apparently haven't moved the needle by offering premium breaks to workers who stop smoking and shed the pounds, corporate America has decided to pick up the stick instead.
A new report by Towers Watson found that employer policies that charge higher premiums for smoking, obesity and high cholesterol have doubled in the past two years to 19 percent of the 248 major corporations surveyed. The authors expect those numbers to double yet again next year.
Academics, benefits administrators and union leaders have all voiced concern as such major corporations as Wal-Mart Stores Inc., PepsiCo Inc., Home Depot Inc., Lowe's Cos. and Safeway Inc. rolled out programs that penalize unhealthy lifestyles rather than merely encourage healthy ones.
Businesses contend that the stick approach is fair because those with unhealthy lifestyles consume an inordinate share of health care benefits, thereby driving up the insurance costs for their employer and fellow workers.
But a number of groups, including the American Cancer Society and the American Heart Association, have warned the feds that lax oversight could create a "back door" through which employers could discriminate against unhealthy employees. Some maintain that increasing premiums on this particular risk group could cause the workers who need health insurance the most to decrease their coverage or even drop their policies entirely.
Wal-Mart raised eyebrows recently when it increased premiums $2,000 a year for some smokers. Other megacorps had been content with modest hikes; Home Depot dings smokers $240 a year, PepsiCo $600 annually.
The move was widely seen as an acknowledgment that when it comes to reeling in its health insurance overhead, big business is prepared to resort to the stick when the carrot proves ineffective.
Carrots didn't work for UnitedHealthcare Group, which dropped its Vital Measures program three years ago due to lack of interest. The program had enabled workers to pare down their deductible amount by achieving health goals.
Current health insurance regulations allow large companies to charge up to 20 percent more to higher-risk employees. Health care reform bumps that number to 30 percent in 2014, and potentially as high as 50 percent.
Question: Do you think it's fair to hold a worker's weight, cholesterol level and/or nicotine use against them in this way?
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