Given the increasing weight of taxation on the middle- and upper-incomes in this country and the first step towards savings 'wealth' taxation [7], it is perhaps no surprise that the nation's employers have decided enough is enough with another implicit tax - healthcare. As the WSJ reports [8], cost-conscious companies (such as spare tire manufacturer Michelin North America) are passing on the additional costs of healthcare to their obese workers. Are you a man with a waist measuring 40 inches or more? [9] Have high blood pressure? Starting next year, your unhealthiness will cost you [10].
Employees who hit baseline requirements in three or more categories (blood pressure, glucose, cholesterol, triglycerides, and waist size) will receive up to $1,000 to reduce their annual deductibles. Those who don't qualify must sign up for a health-coaching program in order to earn a smaller credit.
But, six in 10 employers say they plan to impose penalties in the next few years on employees who don't take action to improve their health, according to a recent study, and current law permits companies to use health-related rewards or penalties as long as the amount doesn't exceed 20% of the cost of the employee's health coverage. Increasingly companies have flipped from the incentive scheme (to be healthy) to a penalty or 'fat tax'.
Typically 20% of a company's workforce drives 80% of health-care costs [11], and with companies unable to grow top-lines, the search for ever more cost-cutting means the balance of carrot and stick seems to be tilting increasingly to the stick.
So the people got their pro-equality Obamacare but if you are an 80/20 risk factor - you will be less equal than others.
Via WSJ, [8]
Are you a man with a waist measuring 40 inches or more? If you want to work at Michelin North America Inc., that spare tire could cost you.
Employees at the tire maker who have high blood pressure or certain size waistlines may have to pay as much as $1,000 more for health-care coverage starting next year.
As they fight rising health-care costs and poor results from voluntary wellness programs, companies across America are penalizing workers for a range of conditions, including high blood pressure and thick waistlines. They are also demanding that employees share personal-health information, such as body-mass index, weight and blood-sugar level, or face higher premiums or deductibles.
Corporate leaders say they can't lower health-care costs without changing workers' habits, and they cite the findings of behavioral economists showing that people respond more effectively to potential losses, such as penalties, than expected gains, such as rewards. With corporate spending on health care expected to reach an average of $12,136 per employee this year, according to a study by the consulting firm Towers Watson, penalties may soon be the new norm.
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Employee-rights advocates say the penalties are akin to "legal discrimination." While companies are calling them wellness incentives, the penalties are essentially salary cuts by a different name, says Lew Maltby, president of Princeton, N.J.-based National Workrights Institute, a nonprofit advocacy group for employee rights in the workplace. "No one ever calls a bad thing what it really is," he says. "It means millions of people are getting their pay cut for no legitimate reason."
Companies may say they have tried softer approaches, but many haven't exhausted their options, ...
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Six in 10 employers say they plan to impose penalties in the next few years on employees who don't take action to improve their health, according to a recent study of 800 mid- to large-size firms by human-resources consultancy Aon Hewitt. A separate study by the National Business Group on Health and Towers Watson found that the share of employers who plan to impose penalties is likely to double to 36% in 2014.
Current law permits companies to use health-related rewards or penalties as long as the amount doesn't exceed 20% of the cost of the employee's health coverage. ...
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"It opens a Pandora's box," says a full-time CVS employee who works at a distribution center in Florida. "It's none of their business." ...
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Honeywell International Inc. HON recently introduced a $1,000 penalty—deducted from health-savings accounts—for workers who elect to get certain procedures such as knee and hip replacement and back surgery without seeking more input. The company had offered $500 for participating in a program that provides access to data and additional opinions for workers considering surgery, but less than 20% of the staff joined up. Since it flipped the incentive to a penalty, the company says, enrollment has been above 90%.
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Typically, 20% of a company's workforce drives 80% of health-care costs, according to Cigna's Mr. Smith, and roughly 70% of health-care costs are related to chronic conditions brought on by lifestyle choices, such as overeating or sedentary behavior. But when employers target those conditions, employees themselves may feel targeted, especially when it comes to their weight. While companies can't say it outright, many of their measures—such as high cholesterol and high blood pressure—are proxies for obesity.
A 2011 Gallup survey estimated obese or overweight full-time U.S. workers miss an additional 450 million days of work each year, compared with healthy workers, resulting in more than $153 billion in lost productivity.
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