What obesity costs your business: The importance of healthy incentives
Michael Rivas and Jill Micklow, for Assurance
Published 9:35 a.m. ET Jan. 23, 2017 | Updated 8:39 a.m. ET Jan. 25, 2017
A late-night drive-thru, a quick stop on a road trip, busy families with
little time to exercise. Obesity has become an epidemic – especially in the
United States, where the convenience of food and lack of time often outweigh
healthy habits. What qualifies a person as being gobese?h The short definition
of obesity is gan excess amount of body fat,h with a body mass index or BMI of
30 or higher.
How many Americans fit the description? According to the National Institute
of Diabetes and Digestive and Kidney Diseases, more than one in three adults are
considered obese. To put this into perspective, say youfre working for a
mid-size company of 450 employees. According to statistics, about 150 of those
employees would likely be obese.
Why obesity matters for businesses
Whether they deem it their job or not, businesses across the U.S. have a
vested interest in maximizing the health and wellbeing of their employees. After
all, obesity-related spends make up nearly 20 percent of all U.S. medical costs
per year and obese individuals spend 42 percent more on healthcare costs,
according to the Journal of Health Economics. Increased medical costs are also
prevalent in Workersf Compensation insurance, as those struggling with
obesity are more likely to require a longer time to heal away from work.
How do the costs of obese workers compare with their healthier counterparts?
According to statistics from Gallup, Duke University Medical Center and StateOfObesity.org, work-related injuries of obese employees
are 25% higher, and compensation claims are filed twice as much. The cost of
those medical claims are also seven times higher than employees at a healthy
weight. Obese employees are also more likely to be absent, averaging ten times
more days off for a work injury or illness.
These facts paint a picture of why obesity in America needs to be aided by
employers, in partnership with their insurance brokers. Many of these statistics
directly relate back to health and workersf compensation insurance premiums, as
well as the indirect costs companies experience. Think of it like an iceberg:
Insurance premiums are what you directly see in the top layer, but you also have
a number of large, hidden cost factors underneath, like productivity and
How employers currently address obesity
Most businesses are currently focusing on the total health of their employee
population in partnership with insurance brokers, through separate and often
disconnected safety programs and wellness initiatives. Not unusually, wellness
and safety programs operate in silos. Human resources focuses on a wellness
program with their employee benefits broker in an effort to lower overall
healthcare costs, while a risk management team focuses on a safety program with
insurance broker to lower workersf compensation costs. Both areas are
working to improve and protect the health of the employees – and in theory, this
sounds wonderful. But the model of separation, unfortunately, often comes up
short in terms of broad impact.
The separate wellness and safety model often fails to acknowledge that
employees with chronic health conditions have more frequent and costly workersf
compensation claims. These issues must be addressed together if real improvement
is to occur. By breaking down the silos and integrating these two initiatives,
employers will be in a much better position to realize effective and sustainable
How to make a combined program successful
Like any initiative, setting long-term and realistic goals is important.
Businesses should utilize employee demographics, benchmarking reports and risk
exposures to develop goals in partnership with their broker. Make these goals
time sensitive, and set key performance indicators (KPIs) to track progress.
Example KPIs can include frequency and severity of injury rate or number of days
missed, wellness participation rates, BMI score and/or smoking and tobacco
As an insurance brokerage, Assurance
often stresses the importance of preventative screenings. Studies indicate more
than half of all U.S. employers currently offer biometric screening options to
employees, but we need more. Think of it like a check engine light on a car.
Biometric screenings can set off an early warning signal that something is not
quite right. By catching factors that lead to obesity, individuals can be more
proactive, further reducing the potential for high medical costs. The
HIPAA-compliant, aggregated data can then be used for goal-setting.
Once goals are established, identify and execute custom initiatives. This can
be done through an on-site wellness team. Have employees take ownership and
provide a clear indication as to how this benefits them individually. One
targeted initiative could be implementing 30 minutes of daily activity to help
reduce joint pain, depression, anxiety and diabetes in the workforce. The
program can include flex and stretch times, walking meetings and participation
incentives for wellness and safety activities.
Maybe absenteeism is a problem. As stated, obese workers are absent ten times
more than the average employee. Try implementing a weight loss program and track
the results of the program against number of days missed due to an injury. This
should reduce the long-term cost of workersf compensation and medical
For reinforcement, donft forget to create a set brand around your program and
its initiatives to keep employees engaged. For example, Assurance integrated an gEye of the Tigerh theme into their culture and communications.