The Obesity Factor – Costing You More for Health Insurance

Most of us gain a few pounds each year, thanks to Valentine’s Day candy, Xbox, and Christmas cookies.  But now those extra pounds just might raise your health insurance rates, whether you have an individual policy or are part of a group health insurance plan at work.

Health insurance premiums are based on likely medical expenses, and overweight workers usually incur more medical costs than smokers or problem drinkers. 

Charging extra premiums to smokers has been around for a while, and now health insurers are adding a charge (frequently about $20/month) for being significantly overweight.  

Obesity is the most expensive challenge for companies too, costing US employers $45 billion annually through medical expenditures and work loss according to The Conference Board.  Some companies are actively trying to help employees lose weight and become healthier with a variety of programs:

• Offering seminars and classes on healthy eating
• Adding an exercise room in their offices
• Replacing high calorie snack foods with healthier choices in vending machines
• Carefully choosing healthy menus for company events
• Cash incentives and prizes for weight loss
• Subsidizing memberships to local health clubs

Some companies have happily found that having a wellness program makes a great recruiting tool to attract and keep superior employees.  That’s one great reason by the end of 2008 nearly 65% of all companies are expected to offer some sort of an obesity reduction or prevention program.

More drastic measures, like offering bariatric surgery, haven’t proven cost effective yet, since most employees change jobs before employers recoup surgery costs.  Employers also have to be careful about discriminating against employees with weight issues – there’s a host of ADA requirements here.

As an employer, especially when you are shopping for small business health insurance, consider what you can do to help employees manage their weight – your premium savings will definitely help to balance the cost of any program.

As an employee, remember that your choices in food and exercise can not only save you money each month for health insurance, but can improve the quality of your daily life.