Companies Track Workers' Waistlines to Boost Bottom Line

CVS is not the only employer interested in its workers' body fat

By Emily Feldman
|  Thursday, Mar 21, 2013  |  Updated 8:27 AM EDT
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Companies Track Workers' Waistlines to Boost Bottom Line

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Employers racing to reduce health care expenses are increasingly focused on workers' medical status, including weight.

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CVS has come under fire for asking employees covered under the company’s health care plan to disclose a range of personal information — from their weight to glucose levels — or face a financial penalty. But that company is far from the only one pushing workers to reveal detailed medical information.

As health care costs tick up and employers rush to comply with new requirements tied to President Obama's Affordable Care Act, many companies are asking their workers (and in some cases, workers' spouses) to undergo rigorous health care screenings aimed at encouraging healthier living — and boosting the company’s bottom line.

CVS Caremark introduced the health screening this year, and fines employees $600 if they don't comply. When news of the screening came out this week, the company was slammed on social media. But CVS isn't alone in using money to encourage employees to stay fit or aware of their health.

At Home Depot, for example, workers covered by the company insurance plan are encouraged to fill out on an online questionnaire and take a “hidden health risk screening” that measures their waistline, triglycerides, HDL cholesterol, blood pressure and glucose levels. They're also given targets: Women should aim for a waistline under 35 inches, while men should try to stay below 40 inches. While no one is required to participate, those who do (regardless of whether or not they hit their targets) can earn an extra $25 every two weeks. Spouses covered by the plan can also participate.

Some companies use data gathered from these tests to drive decision-making about the sort of health services they provide their employees, while others use it for targeted outreach, said Julie Stone, a senior consultant at Towers Watson.

If a person is significantly overweight, for example, he or she may receive information about weight loss programs.

The idea is that employees, inspired either by the promise of extra cash or the threat of losing cash, will work harder to be healthier. And healthier employees are both more efficient and cost the company less money.

While health care costs have always been an important consideration for executives, they've become an even bigger priority since the Supreme Court upheld the president's health care overhaul law last year. In 2018, a provision of the law will kick in that taxes companies 40% for any coverage that exceeds a certain threshold — $10,200 for individuals or $27,500 for families each per year.

To avoid the tax, employers are encouraging their workers to lead healthier lifestyles, and are asking them to pay more for their health coverage.

“I absolutely believe that’s one of the root drivers for more of these companies looking at [health screenings] now,” said Stone. “It’s a really steep tax … I don’t know a single CFO who would say, ‘Sure, I’ll pay that tax, no problem.'”

More than two-thirds of employers already offer financial rewards to encourage workers to participate in health and wellness programs, according to a survey released earlier this year by Towers Watson/National Business Group on Health. Sixteen percent of the 583 employers polled said their companies use rewards or penalties to gather specific biometric information from their workers, and another 31 percent said that they were considering implementing such a strategy for 2014.

Companies emphasize that medical data collected during these screenings is intended to improve employee health and not to make employment decisions, though privacy advocates are wary.

Home Depot, which describes its health program as "win/win," assures employees in a health guide posted to its website that the company "will not have access to your results and your results will have no effect on your employment or your medical coverage."

CVS Caremark said in a statement that "all personal health data from these screenings are collected and reviewed by a third party administrator" and that the data "is never shared with CVS Caremark."

Dr. Deborah Peel, the founder of Patient Privacy Rights, expressed doubts about CVS's assurances.

"There's no chain of custody for health data," she told the Boston Herald. "So there's no way to verify that they don't really look at it."

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