Hospitality Industry Health Insurance Trends: Large Employers Are Starting To Require Employees To Disclose “Unhealthy Habits” With Resulting Health Insurance Premiums Being Higher Than “Healthier” Workers

“…Navistar Inc. executives turned up the heat on smokers five years ago as part of a pioneering move to improve employee health and rein in medical costs…”

     Smoking employees are now required to disclose their habit during the open enrollment period for health insurance or, if they fail to truthfully answer, risk violating the company’s ethical business policy.

Some critics consider it intrusive and discriminatory to penalize unhealthy behaviors like smoking and reward people for taking positive actions such as losing weight. Nevertheless, other employers—fed up with rising obesity rates and related health costs—are following Navistar’s lead. Nearly two-thirds of large employers either have a smoking penalty or plan to impose one during the next three to five years, according to a 2010 Hewitt Associates Inc. survey of nearly 600 employers.

As long as Navistar employees continue to light up, they pay higher premiums—$50 more monthly. The policy applies only to nonunion workers, slightly more than half of Navistar’s 11,000 U.S. employees; union health benefits fall under a separate contract. Navistar realized the smoking surcharge could be controversial. “We were a little hesitant that we were setting ourselves up for some employee complaints,” says Dawn Weddle, wellness and behavioral health manager at Warrenville, Illinois-based Navistar, which makes trucks, RVs and other vehicles. Feedback was generally positive, with some “rumblings” but no formal complaints, Weddle says. “You have to remember: The majority of employees don’t smoke.”

     The insurance premium penalty is helping to reduce the number of smokers even more. The percentage of employees reporting that they smoke has declined from 10.3 percent in 2005 to 8.6 percent in late 2009.

         In Alabama, however, state officials have chosen a positive incentive to encourage high-risk employees to consult a doctor or seek other medical help. The state provides a $25 monthly discount on health insurance premiums to all employees who receive such wellness screenings, whether their medical risks are high or low. But employees identified as high risk must take an additional step, such as seeing a doctor or enrolling in a wellness program, to retain that discount. Alabama decided not to tie the incentive to specific health goals but rather to simply try to motivate employees to seek medical feedback, says William Ashmore, chief executive officer of the State Employees’ Insurance Board in Alabama.

For more:   http://www.workforce.com/section/benefits-compensation/feature/special-report-health-benefits-butting-in/index.html