Fat: Workers are told to shape up or pay up

Get healthy or get fired

Some large employers fight rising insurance costs by regulating workers’ smoking, weight, lifestyle

By Tim Jones
September 26, 2007

LANSING, Mich. – Get ready to say goodbye to the days of high-fat meals, junk-food snacks and that after-work cigarette you always enjoy smoking – at least if you intend to have a job and health insurance.

The rules of the workplace are changing, and personal behavior and lifestyle habits – those unrelated to what you do at work – are now fair game for employers determined to cut health-care costs.

If you smoke, you might not get hired or you could get fired. If your cholesterol is too high, you can pay higher premiums for your insurance. The same goes for blood pressure, body mass and blood glucose levels. The requirements embraced by a growing number of companies are encroaching on privacy and raising questions about who will qualify for health insurance, as well as employment.

“Employers are trying to thin out their health-care costs, by any means necessary,” said Jeremy Gruber, legal director for the National Workrights Institute of Princeton, N.J. “We’re only seeing the beginning of this. Employers started with smokers. Now they’re moving on to the general population.”

Indianapolis-based Clarian Health has told its 13,000 employees that, starting in 2009, it will charge them $5 per pay period if they use tobacco or exceed specified levels of cholesterol, blood pressure and other measurements. Penalties could reach $30 per paycheck.

The Cleveland Clinic, on Sept. 1, started nicotine testing in pre-employment physicals. If nicotine is found, applicants will not be hired.

And Weyco Inc., a Michigan firm that drew national attention in 2005 when it fired four employees who used tobacco, has expanded the health insurance requirement, penalizing employees whose spouses smoke or chew tobacco. Penalties are $50 per employee paycheck.

Although thousands of employers have put in place incentives for their workers to live healthier lifestyles, the vast majority of employers have not embraced the approach of penalizing employees who don’t satisfy medical or behavioral dictates.

But punitive measures are gaining a foothold in the workplace, according to lawyers and groups that follow insurance and employment trends, because health-care costs are growing at high single-digit to double-digit rates annually.

The question for employees is: How far will these requirements on personal habits and penalties go, and what sort of criteria will employers use to define good health?

“Your privacy is being whittled away, piece by piece,” said Anita Epolito, who was fired by Weyco, a health benefits administrator, in 2005 after refusing to stop smoking.

“They’re trying to change behavior after 5 o’clock,” Epolito said. “What’s next? No McDonald’s? No caffeine? No Krispy Kreme?”

Gary Climes, vice president and general manager of Meritain Health Michigan, which now owns Weyco, noted that the firings did not violate Michigan law and that Weyco’s 150 employees have, over time, accepted the new rules.

“It really comes down to a personal choice as far as do you want to be employed here,” Climes said. “We’re putting that on the employee to make a choice.”

Weyco performs random testing every three months, usually covering about 30 employees, Climes said. They’ll get a call at their desks asking that they come to a room and blow into a Breathalyzer-like device that measures carbon monoxide levels. If the reading is higher than a certain level, employees will be directed to submit to a urine test. If they fail the urinalysis twice, they will be dismissed. One person was fired in 2006, Climes said, and none this year.

Obesity and galloping health-care cost increases for many employers have fueled the movement to reduce employer costs.

“Costs are spinning out of control, and companies don’t want to be left holding the bag,” said Chicago lawyer H. Candace Gorman, who specializes in labor and employment law.

“They will cut as many people for whatever reasons they can get away with. Until Congress steps to the plate and joins the rest of the Western world in mandating universal coverage, the employers and insurance companies will whittle away the coverage, hoping that only the healthy will be covered.”

Political critics of the Weyco firings have launched an effort in the Michigan Legislature to outlaw the practice, but it faces stiff resistance from the state’s business community, led by the Michigan Chamber of Commerce.

Wendy Block, the chamber’s director of health policy and human resources, said the Weyco firings have created “negative PR” for the company but added that her organization opposes any effort to restrict the freedom of employers to control costs. Most employers, Block said, do not penalize employees.

Toni Talbot, a human resources consultant, said firing employees for tobacco use is “bad policy” and “intrusive.”

“Do I want people to live healthy lives? Yes,” Talbot said. “Do I want to get into their daily lives? No.”

That line is blurring. In 2006, Scotts Miracle-Gro Co. fired one of its employees in Massachusetts after discovering that he smoked. The employee has sued the company, alleging that the dismissal violated his civil rights.

Although anti-discrimination laws in 30 states and the District of Columbia outlaw what happened in Michigan, there are few clear limits on how far employers can go when it comes to hiring and insuring people who are not disabled.

That void has created the current changing climate and all the questions about what might come next.
Tim Jones writes for the Chicago Tribune.

---

Making obese pay higher health premiums slammed

Sept. 17, 2007
CARRIE MASON-DRAFFEN
This is a bandwagon employers might want to think twice about before jumping on.

Some companies nationwide are tackling health-care costs by charging obese employees higher premiums. But local experts, including attorneys who represent employers, have poohpoohed the approach because they believe the solution could be worse than the problem.

Commack attorney Allen Breslow said that the weight- differential costs could violate obese employees’ rights. “I have serious questions about whether that is an appropriate way to treat a medical problem,” he said. “It might be an ADA [Americans With Disabilities Act],” violation … I just wouldn’t let my clients touch it.”

In fact, an attorney for the U.S. Equal Employment Opportunity Commission, which enforces the ADA, echoed that concern, especially regarding the morbidly obese, generally considered to be individuals at least 100 pounds overweight.

“If they targeted the morbidly obese, then I think there would be an ADA claim,” said Elizabeth Grossman, regional attorney in the EEOC’s Manhattan Office.

Another local lawyer questioned whether singling out individual employees could violate state insurance law.

“An employer has to be very careful when it comes to offering insurance coverage to staff under a group policy if it attempts to make selections that are based on someone’s individual characteristics,” said Carmelo Grimaldi, a partner at Meltzer, Lippe, Goldstein & Breitstone in Mineola. “Insurance statues could potentially prohibit that.”

Many companies in New York State couldn’t charge obese employees for health insurance even if they wanted to. State-mandated “community-rated” premiums for small businesses with fewer than 50 employees (the majority of businesses on Long Island, for example) require an insurance company to charge all its customers in the same geographical region the same premium for the same products.

“This law was passed to avoid an employer paying higher premiums because of the demographics of the employees,” said Susan Sajiun-Fitzharris, president of United Benefit Consulting Inc., a Smithtown brokerage and consulting company.

Obesity has become a hot-button issue because of the dramatic increase in the number of obese Americans, illnesses associated with being overweight and the rising costs of health benefits.

The condition can lead to diabetes, which in turn leads to illnesses such as blindness, kidney failure and heart problems, said Toni A. Riedel-Lehmann, associate director of the Long Island chapter of the American Diabetes Association, which recently launched a national initiative to encourage employers to partner with the group to tackle diabetes among workers.

She said employers pay an average $13,000 annually to cover an employee’s cost of managing diabetes, compared with $2,300 for an employee without the disease.

Increasingly, though, local companies and their insurance companies are offering programs to encourage employees to improve their health, said Sajiun-Fitzharris.

For example, she said a corporate client in Manhattan offers $250 to employees who successfully complete a 10-week Weight Watchers program.

Oxford, a health-maintenance organization, offers the employees of its corporate clients $200 if they document that they have gone to a gym that promotes cardiovascular wellness at least 50 times in a six-month period, she said. Spouses are reimbursed $100.

Oxford even has a program to encourage the children and grandchildren of employees to eat healthy, she said. “Insurance companies have valuable resources to promote wellness and reduce risk associated with illness,” she said.

---

Clarian Scales Back Employee Health Demands?
September 13, 2007?
Instead of charging its employees for failing to quit smoking, lose weight or improve other health factors, Clarian Health Partners now will give them incentives to change bad health habits.
Beginning next year, Clarian had planned to charge employees $5 per paycheck-or $130 a year-if they smoked cigarettes and weren’t trying to quit.
The hospital system planned to assess similar fees in 2009 for employees who were obese or had high glucose, cholesterol or blood pressure, and who weren’t improving on those measures.
Now, in a policy change announced Aug. 31, Clarian will pay employees $5 per paycheck if they quit smoking. In 2009, it will offer similar incentives for those who improve the other four health factors.
Clarian said the change came after employee feedback, question-and-answer sessions conducted by human resources and a follow-up survey.
The program, announced in June, grabbed enough attention that NBC’s “Today” show had Clarian CEO Dan Evans on to discuss the program.
In a written statement on its Web site, Clarian said it “has remained committed to providing a health benefit plan that works for employees, empowers them to take control of their health, and provides the support mechanisms to make changes if they decide to do so.”

---

Clarian Health to Dock Employees’ Pay if They Don’t Quit Smoking and Control Weight, Blood Pressure, Cholesterol, and Blood Sugar; Unsafe Sex Still OK
8/8/07? By Michael Siegel

---

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

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?”