Workers are told to shape up or pay up

Workers are told to shape up or pay up
To hold down medical costs, some firms are penalizing workers who are
overweight or don't meet health guidelines.
By Daniel Costello, Times Staff Writer
July 29, 2007

http://www.latimes.com/business/la-fi-obese29jul29,0,6468472.story?coll=la-home-center

Looking for new ways to trim the fat and boost workers' health, some
employers 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.

In one of the boldest moves yet, 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."

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.

Locally, 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, 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.

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.

"When we have birthday parties now," Dunlap said, "people don't want
sugar-laced cake and candy; they want fruit and deli trays."

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.

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.

Employers might be motivated by new federal rules.

In January, the Department of Labor implemented final clarifications
on the Health Insurance Portability and Accountability Act of 1996
that said employers could use financial incentives in wellness
programs to motivate workers to get healthy.

Still, some lawyers say weight-based compensation plans may run afoul
of other employment laws.

"A key protection in the Americans with Disabilities Act is that
employers can't discriminate against employees based on their health
status," said J.D. Piro, a principal at Hewitt Associates' healthcare
law group. "This is a fight that's likely going to be dealt with in
the courts."

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 - and in some cases have fired - 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.

At Clarian, employees' pay will be docked if they fail to meet certain
weight-to-height ratios, and cholesterol and blood pressure levels or
if they smoke. The cutoffs: a body-mass index over 29.9; blood
pressure over 140/90; or LDL cholesterol over 130.

Brittney Manning, 29, a patient advocate at Clarian Health's Methodist
Hospital in Indianapolis, said many employees were taken aback when
the plan was announced last month. But she approves.

"I think it's fair for people to pay according to what their
healthcare costs are," she said. She doesn't expect to have to pay the
higher fee because she says her weight is normal.

In Arkansas, Deeann Gutekunst, 42, a Benton County deputy treasurer,
said she understood the rationale for the county's policy.

"If you have employees who don't care about their health," she said,
"what else are you supposed to do?"

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