Ind. Company Plans to Charge Workers for Unhealthy Habits

July 5, 2007

Unhealthy habits could cost Clarian Health employees a healthy chunk of money as the company tries to rein in rising health care costs.

Starting in 2009, Clarian will begin charging workers extra for insurance if they let health risks such as smoking, obesity or high cholesterol go unchecked.

Questionnaires and screenings will be used to detect health risks. Workers who fail to measure up in five areas _ including body mass and blood pressure, will have up to $30 deducted from each biweekly paycheck if they can’t prove they’re working to improve their health. Workers who smoke will pay $5 extra every two weeks starting in 2008.

The Indianapolis-based health care provider is not the only company to ask employees to shape up, but it’s one of a few that’s moving beyond the honor system.

“What Clarian is laying out is sort of on the bleeding edge,” said Michael Haffey, a partner with Zionsville insurance broker Agency Associates. “Most employers in central Indiana are not adopting those strict requirements.”

The law allows employers to use financial incentives in wellness programs to motivate workers to adopt more healthy lifestyles, said Mike MacLean, a partner at Indianapolis law firm Baker & Daniels.

But federal law prohibits a person in a group health insurance plan from being discriminated against because of personal health factors, he said.

Jerry Sullivan, a Clarian computer analyst who smokes, said he didn’t like the idea of certain workers being singled out for higher insurance rates. “I’m not real happy about it. It seems a little intrusive,” he said.

Clarian said it is giving employees time to make improvements before most of the extra charges take effect and is providing them with free smoking-cessation and wellness programs.

“We’ve really, really focused on integrating wellness into our health-plan design,” said Sheriee Ladd, vice president of human resources for Clarian Health. “As an employer, we’ve got to be really conscious of our health-care costs.”

Employers generally pay the bulk of health care costs, and Clarian said its health insurance premiums increased 15.7 percent in 2007 and 12.9 percent in 2006.

And health risks can add to those costs. For example, a recent study by Thomson Health Care found that workers who were moderately obese had health-care costs that were 21 percent, or $670 a year, higher than workers with normal weight. For those with severe obesity, annual health-care costs rose 75 percent, or $2,441 per person.

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