Struggling with Insurance Costs, More Companies Offer Employees Incentives to Get Healthy

If you had an essential bill that more than doubled in cost since 2001, you probably wouldn’t want to pay it.

Now you know how employers feel about the cost of health insurance for their workers. The Kaiser Family Foundation reports that the cost of employers providing health insurance for a family has increased 113 percent since 2001.

And since about 55 percent of all Americans get their health insurance through an employer, you can probably guess who is going to be asked to pay part of that surging premium cost: you.

Not only may workers be asked to pay a larger part of the premium, but some employers are offering discounts on the worker’s share if they agree to exercise regularly, participate in disease management programs, or quit smoking.

Proponents of these wellness plans claim the discounts are effective by offering financial incentives to individuals who agree to make healthier life choices and manage chronic conditions such as obesity, high blood pressure, and diabetes, which are major contributors to the skyrocketing cost of heath care.

While there is a dearth of evidence to prove that these wellness programs promote healthier workers and lower-cost medical expenses for companies, the idea seems to have legs. In 2010, an estimated 49 percent of employers offered reduced rates or bonuses for participating in wellness programs, according to AON Hewitt consulting. Last year, the number of employers offering discounts swelled to 54 percent, and the trend doesn’t seem to have reached it peak yet.

But not everyone is in favor of allowing employers to dictate personal choices of lifestyles just because they are providing health insurance coverage. Some claim it’s an invasion of privacy while others fear that it may lead to discrimination against workers with chronic heart disease or diabetes. Already states such as California and Colorado are working on protections to make prohibit discrimination and make sure that all workers have equal access to health care coverage.

When companies weigh the relative health care costs of obese or smokers against the cost of health care for non-obese or non-smoking workers, the financial considerations make a strong statement. That’s the whole motivation for providing discounts for workers willing to participate in wellness programs.

Under current federal law, employers can offer financial incentives for participating in wellness programs that equal 20 percent of the total health care premium. In 2014, that will be raised to 30 percent.

Based on today’s average cost of employer-sponsored medical coverage, that could raise the value of these programs to $1,600 for an individual and up to $4,500 for a family. You may not like it or it may not seem fair, but employers have taken the position that as long as they are paying the bulk of the costs of your medical care, they should have a right to ask you to live a healthier life.