Cutting costs, any way they can

Employers who buy health insurance can pare costs in several ways. Some pressure employees to switch to generic drugs, take preventive measures during flu season, and limit doctor visits for colds and other minor maladies. Others have tried to lower insurance costs by putting a price on vice - penalizing unhealthy behavior such as smoking and overeating. Sixteen percent of the nation's largest employers make workers who smoke contribute more than nonsmokers to cover health-insurance premiums, according to Mercer, a global human resources consulting firm.

Small business is following suit, adding thousands of dollars to the deductibles of workers who suffer from obesity or high cholesterol. (To comply with federal law, employers must offer programs such as smoking-cessation classes or Weight Watchers (WTW) to help workers get fit.)

At Independent Alliance Banks, a bank holding company in Fort Wayne, employees can undergo an optional annual screening that measures body mass index, blood pressure, cholesterol and tobacco use. Test results determine employee deductibles; merely taking the test leads to a reduction. Independent Alliance's family plan sets a deductible of $1,400 for workers who score in the healthy range on all four tests. For those who won't take the test, that number jumps to $5,400. Independent Alliance hasn't exactly set the bar too high to start - employees can be substantially overweight, but not obese - but promises stricter standards in 2010.

Such penalties represent a new twist on a decadelong effort by employers to reverse the nation's slide into sloth - and save money on insurance. In the 1990s companies of all sizes started wellness programs to push workers to shape up and lose weight. Some even offered rewards such as movie tickets and cash. Results were mixed.

"People put pedometers on their dogs to log mileage and did all sorts of crazy things to win the prizes - anything but exercise or lose the weight," says Doug Short, CEO of BeniComp, which crafted the cost-reducing plan for Independent Alliance. "Now people have to take responsibility for their health."

Anecdotal evidence aside, it's unclear that wellness programs make a major dent in health-care costs. And despite the increasing popularity of this approach, it has another downside: TMI. That's "too much information" - about workers and their private lives. Some business owners confess they are uncomfortable discussing personal health issues with workers or sponsoring contests that require embarrassing weigh-ins reminiscent of The Biggest Loser.

"I have one employee - kind of a big guy - and we've got to keep him under a certain weight," says Cole, the body-shop owner. "I hate telling someone to lay off the doughnuts. And I don't like nagging folks not to go to the doctor for a sniffle, but I do it now."  

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