A new solution to the obesity crisis?

Employers can now cut insurance co-pays for workers who follow healthier lifestyles.


(FSB Magazine) -- Midwestern hospital operator Clarian Health caused a stir when it announced that next year employees who smoke will be assessed $5 per paycheck in extra insurance co-payments, and that in 2009 it will extend the penalty to workers with high cholesterol, blood pressure and blood glucose; obese employees will be charged $10 extra.

Final federal rules for such programs went into effect in July, giving employers firm legal footing to push workers into healthier lifestyles. Rex Materials, a $20-million-a-year maker of insulation in Fowlerville, Mich., has proved the programs work. In 2005 President David Rex offered to cut premium co-pays $10 a week, or about 20 percent, for workers on the PPO plan who undergo a health-risk assessment.Those who maintained a minimum rating or raised their scores closer to the cutoff by taking steps, such as quitting smoking or lowering blood pressure, kept the discount.

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In 2006, when the average small firm saw health premiums rise 8.8 percent, Rex had no increase. Sharon Cohen, health-care benefits counsel at Watson Wyatt Worldwide, says Rex's carrot beats Clarian's stick. "Positive reinforcement always works better," she says.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.