Fat Fees and Smoker Surcharges. More states adopt tough-love wellness initiatives

1. Fat Fees and Smoker Surcharges.More states adopt tough-love wellness initiatives By Melba Newsome Time Magazine Nov 30, 2009 Presentation by Anna Schneider

2. Introduction • Employer sponsored wellness plans is no new idea, but there have been some recent developments to make them more effective. • The Kaiser Family Foundation states that nationwide, employee premiums have increased by 131% over the last decade making this an issue that needs to be controlled. • Obesity and smoking/tobacco related are estimated to cost employers $108 million and $137 million annually, respectively according to the North Carolina State Plan. • North Carolina and Alabama are implementing different programs to state workers attempting to achieve the same goal: a healthier group which will lead to less insurance claims and costs to the company.

3. Sticks VS Carrots North Carolina: Sticks Starting in July 2010, all state workers that smoke will move from an 80% co-pay to a 70% co-pay unless they enroll in a smoking-cessation program. In 2011, a person with a BMI under 40 can remain at the 80% co-pay for the first year, but must be down to 35 by the next year, or must enroll in a weight loss program to qualify for the 80% co-pay Alabama: Carrots All state workers have a $70 monthly premium for their benefits. For those that do not smoke, they will get $30 off. After the 31st, those who allowed themselves for a screening could get an additional $25 off their monthly premium, or those with a BMI above 35 could enroll in a weight loss program to receive discount

4. Additional Annual Cost Per Employee

5. Pros and Cons • Since the anti-smoking Alabama plan began in 2005, there has been a 4% decline in the number of smokers. • Safeway supermarket chain implemented a wellness plan similar to that of Alabama, and has found a way to decrease their employees insurance premium by $800 a year, and the employer has been able to keep it’s per capita insurance cost flat for the past 5 years. • American Heart Association, American Cancer Society and 61 other organizations were not in favor of either plan deeming it “ a penalty for failing to achieve a specific health status.” • Other government programs aimed at anti-smoking and wellness. • Authors last statement: “people who get caught speeding have to pay higher car insurance. Has that made us all safer drivers?” • Democratic and Republican support in the senate for raising the premium reductions from 20% to 50% and also support lifestyle bonuses.

6. Bibliography • Newsome, Melba. "Fat Fees and Smoker Surcharges. More states adopt tough-love wellness initiatives." Time 30 Nov. 2009: 63-64. Print.