Haven't quit smoking, lost weight? Pay more for health insurance, more companies say

In an effort to keep health-care costs down, companies across the country, including Walmart, are opting to charge workers who smoke or are obese higher premiums than their more healthy colleagues. (Reuters photo by Lucas Jackson)

The move is the follow-up to a strategy many companies have already tried: to encourage workers to take better care of their health by offering benefits like weight-loss programs or smoking-cessation classes. But with few signs of the health-care landscape changing, "They're replacing the carrot with a stick and raising costs for workers who can't seem to lower their cholesterol or tackle obesity," reports Jillian Mincer of Reuters.

One example is Walmart, which in 2012 will start charging its smoking workers higher premiums. It will also offer cessation classes. A company spokesman said people who use tobacco use about 25 percent more health-care services than people who don't: "These decisions aren't easy, but we need to balance costs and provide quality coverage."

Critics say the move will limiting people's freedoms, create employee resentment and hut the lowest-paid workers hardest. "It's not inherently wrong to hold people responsible," said Lewis Maltby, president of the National Workrights Institute. "But it's a dangerous precedent."

Though well-intentioned, these policies can create bitterness. Mark A. Rothstein, a lawyer and professor at the University of Louisville School of Medicine, said having a colleague call to ask about a person's weight loss can be seen as intrusive. That's part of the reason why the janitors at the school participate, but "the professors on campus consider it a privacy tax, so we don't get some stranger calling us about how much we weigh."

Nevertheless, many companies are moving forward with the option. In 2012, almost 40 percent of large and mid-size companies will start using penalties to control unhealthy behavior. That's up from 19 percent this year and just 8 percent in 2009, an October survey by consulting firm Towers Watson and the National Business Group on Health shows. "Nothing else has worked to control health trends," said NBGH Vice President LuAnn Heinen. "A financial incentive reduces that procrastination."

Cleveland Clinic, with a staff of 40,000, has implemented a comprehensive program and seen its health-care costs grown just 2 percent this year. "The effort began several years ago when it banned smoking at the medical center and then refused to hire smokers," Mincer writes. "It later recognized that having a gym and weight -oss classes wasn't enough to get people to participate. It made these facilities and programs free and provided lower premiums to workers who maintained their health or improved it." Paul Terpeluk, medical director of occupational health at the clinic, said employers have to develop a program and change the culture: "You don't do this overnight." (Read more)