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Rising obesity-related health care costs are leading some employers to take a firmer approach to workplace wellness programs despite the potential to violate anti-discrimination laws.
Claims by obese workers with chronic conditions often result in the highest medical costs, “because what travels with obesity are so many other factors,” such as diabetes and high blood pressure, said Misty Price, Richardson, Texas-based chief operating officer at workers compensation defense law firm Adelson, Testan, Brundo, Novell & Jimenez.
Ms. Price said more employers are asking, “What's happening on our watch?”
Obesity and its financial effect on the economy — and on employers in particular — is expanding, according to two new studies.
In one November study, consulting firm McKinsey & Co. estimated that obesity costs the global economy $2 trillion a year.
In a separate study published in November in the Journal of Occupational and Environmental Medicine, researchers at Yale University said obesity-related work absences alone cost the U.S. economy $8.65 billion a year — a figure that the researchers and the Integrated Benefits Institute said is increasing with the number of obese adults.
With cost a factor, many employers that Ed Coates works with are moving to implement wellness initiatives or tightening existing programs, despite the potential for complaints or lawsuits, said the Austin, Texas-based senior manager of employee services at Texas Mutual Insurance Co.
Complaints alone prompted the U.S. Centers for Disease Control and Prevention to pull its 5-year-old Lean Works! workplace obesity prevention and control campaign offline in early November. Several groups complained it could result in workplace discrimination, a CDC spokeswoman said.
The program, which included an obesity cost calculator employers could use, is currently “under review,” the spokeswoman said.
At the same time, the U.S. Equal Employment Opportunity Commission has sued several companies, including Honeywell International Inc., on grounds that offering workers incentives to participate in wellness programs or required biometric screenings violate the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act.
The EEOC earlier this year proposed a rule that would address how or if financial inducements and penalties could be incorporated into employer wellness programs, but further action is not expected until next year.
“The ADA issue ... has certainly created challenges for employers. There's no doubt about it,” said Tom Parry, president of the Integrated Benefits Institute in San Francisco. “At the same time, I don't see employers giving up because of the challenges of the ADA. They recognize that this is a significant issue that they absolutely have to deal with.”
Texas Mutual has had a wellness program since 2001 to help improve employee health and control costs associated with risks such as obesity or diabetes, Mr. Coates said. The outcomes-based incentive effort incorporates federal guidance for the Health Insurance Portability and Accountability Act and the Patient Protection and Affordable Care Act, he said.
Employers “are going ahead and taking more aggressive action, and not taking the wait-and-see approach,” Mr. Coates said. “Compared to where it was five years ago, there are a lot more employers doing outcomes-based wellness incentives and also investing in wellness programs in general.”
Aside from standard health care, the return on investment in wellness programs also can be seen in disability and workers comp programs, Ms. Price said. “High-risk cultures are more likely to take some proactive measure,” she said. “Beyond health and wellness, are you willing to offer things like (weight loss) surgeries as a part of your health plan or your workers compensation plan? If you're a low-risk culture and ... you don't want to go down that path,” think about what kinds of snacks are in break room vending machines. “Have you made healthy options available to (workers)?”
Elsewhere, the School District of Palm Beach County, Florida, is shifting to an outcomes-based wellness program in 2015, said Kim Sandmaier, wellness coordinator for risk and benefits management.
The revised program gives employees the option to complete a health risk assessment and a biometric screening “and either meet targets for those biometrics or complete a reasonable alternative,” such as an over-the-phone coaching program, she said.
“Our data specifically (showed) diabetes was a concern, so we're continuing to focus on that,” Ms. Sandmaier said.