Frugal Confessions

A guide to living thrifty with Amanda L. Grossman

Healthcare Disincentives for Bad Behaviors Could Cost You Money


Beginning on January 1, 2012 there was a change to my healthcare plan at work. Plan participants who used tobacco 5 or more times in the 90 days leading up to the first of the year are now subject to an additional health insurance premium cost of between $30 to $90 per month. The amount is dependent upon how many covered family members use tobacco. Declaring if we are smokers was conducted voluntarily through filling out some paperwork.

My employer is certainly not the first to institute higher premiums for poor health habits. According to a study by eHealth, smokers pay 14% higher premiums than the average premium paid by non-smoker employees, and employees in the ‘Obese’ BMI category pay an average monthly premium 22.6% higher than employees with ‘Normal’ BMI. Wal-mart, the nation’s largest employer, also made headlines recently when they began to charge smoking employees an extra $260 to $2,340 per year in healthcare premiums than non-smoking employees.

This is not an unexpected trend considering the times. The connection between ill health and smoking, being overweight, high cholesterol, etc. has been quantified. Smokers cost employers between $3,000-$4,000 more per year in health insurance than non-smokers (though some stats around the web say it is $1,000 per year more—I am sure the truth is somewhere in the middle).  Obese employees can cost employers between $1,143 and $6,694 per person depending upon BMI, gender, etc. Since the economy has been in a recession, companies and government employers alike have been finding ways to cut expenses and keep their ships afloat. It only seems natural that they would begin to do this.

Each employee in my office receives a mandatory physical once a year due to the nature of my work, so it would not be a far stretch to assume that one year they might get their information on whether or not we use tobacco, our body mass index (BMI), and any other metric they might use to increase health insurance premiums straight from a doctor. I’m not suggesting that people should lie about whether or not they use tobacco between now when we voluntarily give this information and the future when it could possibly be reported for us, but I am suggesting that in my line of work our employer’s connection to our health is a little too close for comfort.

I am not a smoker and I am not obese. However, I do have borderline high cholesterol due to genetics (my diet is pretty good, though there is always room for improvement). Should I be penalized for my cholesterol? On the one hand it seems fair that I should pay a higher cost for my health insurance than others. On the other hand, this is a scary proposition.

Do you currently pay a higher premium for any health issues? If so, has it been an incentive for you to change any habits? How do you feel about this trend?

Categories: General

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