Economic News, Healthcare, Smart Spending

Poor Lifestyle Can Mean a Poorer Pay Check

Employers saw sticker shock when they paid their employee’s 2012 health insurance premiums. Average corporate spending on health care insurance per employee was $11,664 according to a study by Towers Watson. The same study pegged employee costs at $2,764. But, your own premium may go up more than your fellow workers in 2013, if you lead an unhealthy lifestyle.

For example, Michelin North America offered all workers an annual $600 credit towards their portion of the premium. This year that bonus increases to $1,000. But, if you are overweight or have high blood pressure, you will not get the money. Michelin says they are doing this, as they need to change employee behavior in order to control health care costs. The company has issued standards for cholesterol, triglycerides, glucose, blood pressure, and waist size. Men can have waists up to 40 inches and women’s waists can be up to 36 inches. Employees who meet the standards in at least three categories may earn up to $1,000 in credits against their annual deductibles. Employees who miss the mark can earn a smaller credit if they register and attend a health-coaching class.

Decisions such as these by Michelin and hundreds of other countries are creating friction between workers’ rights advocacy organizations and employers. Employee advocates decry the action as cutting the pay of millions of workers without cause. Harsher criticism includes slogans such as “legal discrimination.”

Advocates may be on to something when expressing their outrage at companies who claim they have tried softer approaches. They usually have not tried other potentially  solutions such as building an on-site fitness center or paying part or all of a membership in a gym or providing healthier foods in the cafeteria.

Discrimination is Legal

Under current law, the use of incentives and penalties is legal providing the amount of either does not exceed 20 percent of the employee’s cost of health care coverage.

CVS Pharmacy chain asked all its employees to report health metrics including BMI, blood pressure, cholesterol, and blood glucose to CVS’ health insurance carrier by May 2013.

Lifestyles Can Cost You

  • General Electric employees who self-identify as smokers pay an additional $652 for health care.
  • Mohawk Industries penalize employees who do not join in a health assessment $100 per month.
  • Failure to report health statistics to CVS’ insurance carrier by May will cost an employee a $600 penalty

Take Away

Lifestyle matters whether you believe it is fair or not. Poor lifestyle habits can cost you significantly by penalties assessed by your employer who pays for your health insurance.