Alabama Plans to Tax Fat Employees to Recoup Insurance Costs
September 2, 2008
by Jana Winter
Alabama is rolling out a creative but controversial program that will subject its 37,527 state employees to possibly humiliating at-work weigh-ins and fat tests. If they tip the scales, they'll be given a choice: slim down or pay up.
The state is trying to solve two of its biggest problems -- health insurance costs and obesity -- in one fell swoop.
Beginning in 2010, Alabama, which has the second highest obesity rate in the country, will start charging all of its employees an extra $25 per month for health insurance. (Currently, single workers pay nothing; family plans cost $180 a month.)
But there's a way to avoid the fee: Get a check-up at an in-office "wellness center," where nurses will check for diabetes and hypertension and measure blood pressure, cholesterol, glucose levels and Body Mass Index (BMI).
The idea is to encourage employees to act responsibly, lose weight and lower their health care needs. But critics say it will humiliate and stigmatize obese employees and amounts to nothing short of a "fat tax."
A BMI test uses height and weigh measurements to calculate the percentage of body fat in adult males and females. Alabama is using a BMI threshold of 35 -- 30 is considered obese, by most medical standards -- to determine who doesn't have to pay the automatic $25 deduction.
Health practitioners often factor in skinfold (fat) and waist circumference measurements while calculating a patient's BMI.
Does Alabama think you're fat? Take this humiliation-free BMI test online.
If you're deemed fit, you're exempt. But if you flunk the BMI exam, it's shape up or pay up. Obese workers will be required to see a doctor and will have to show proof of their attempt to lose weight.
The program is optional ... sort of. If you don't take the tests, you'll have to pay the $25 charge.
The $25-per-month fee is not the only way Alabama hopes to discourage bad health decisions by state employees, said the program's creator, William Ashmore, executive director of the Alabama State Employees' Insurance Board. Alabama already charges smokers a monthly $25 insurance fee.
"There are folks walking around with diabetes and hypertension that don't even know it, and it's just a matter of time before something catastrophic happens to them," Ashmore said. "If we can get people to manage their health, we'll have healthier employees and less healthcare costs."
He said employees with a BMI of 35 or higher cost the state 40 percent more than those with a BMI under 35, and the program will help in many ways. "This is not a fat tax," Ashmore said. "It's not punitive."
But that's exactly what critics are calling it: a punitive "fat tax" designed to stigmatize the obese by inappropriately -- and possibly illegally -- bringing weight into the workplace.
"This is a dreadful, dreadful policy," said Judith S. Stern, an obesity expert and nutrition professor at University of California at Davis. "Overweight and obese people, especially women, feel that their weight is private, and being weighed at work is like having a prostate exam in the hall. It's not appropriate."
Critics also say Alabama's program borders on discrimination by using obesity, which is medically categorized as a disease, as its benchmark.
"I think it discriminates against people with a disease -- obesity is a disease," Stern said. "Would you charge more money if they had breast cancer?"
Alabama's program is a dangerous step on a very slippery slope, says Mark V. Pauly, professor of health care systems at the University of Pennsylvania's Wharton School of Business. "The unanswered question is, 'How much you want to do this?'" he said. "If you got lung cancer because you smoked, do we charge you a penalty there? What about couch potatoes? Do we put all the employees on treadmills?"
Medical and social considerations aside, other critics say it's just not going to work. "There's the thought that obese people are weak-willed, and if we charge them more they won't be as fat," Stern said. "This assumes they have control over what's involved, and often they don't."
And there's the cost factor. In its efforts to reduce heath care costs Alabama will spend an extra $1.6 million for health screenings and programs next year.
"From the viewpoint of the employer who provides health care and pension, this kind of cancels out," Pauly said. "What you lost on health care you get back in pension plan, because now these people are living longer."
Whatever the plan, a company's success in lowering health care costs and curbing obesity could depend entirely on how it's framed. Rewards tend to work better than punishment.
"It's possible to set these things up to look like more like carrots than sticks," Pauly said. "And people tend to respond better to carrots."
Alabama isn't alone in its struggle to cut costs and curb obesity. Two-thirds of American adults are overweight or obese, according to a recent report from Trust for America's Health, a nonprofit organization based in Washington, D.C.
Clarian Health Partners, a hospital chain in Indiana, has taken a different approach. In 2009, they will start deducting money from the paychecks of workers who do not meet -- and don't show efforts to meet -- various health criteria. Smoking without trying to quit will cost $5; high glucose, high blood pressure and high cholesterol levels will cost $5 each; a high Body Mass Index will cost $10.
This is also happening abroad. Japan is monitoring the waist measurements of its policyholders, according to official government websites. Citizens receive jury duty-like summonses to appear for measurements -- and if they're too fat, their employer will be slapped with a hefty fine. The maximum waist size allowed for men is 33.5 inches and 35.4 inches for women.
It's unlikely that Japan's program will catch on stateside, but that doesn't mean Americans are off the hook. Alabama's so-called "fat tax" could just be the beginning of a trend.
"A lot of employers are talking about this," Pauly said. "There's the feeling that you have to do something. What you do then is a matter of design and discretion."
As for Alabama, Ashmore is sure that those who have their doubts will soon come around. He encourages workers to swing by his Montgomery office to pick up pamphlets about the program and to learn more about reducing their Body Mass Index.
But to get to his second-floor office they'll first have to make it past the Chick-Fil-A downstairs (average meal: 1,000 calories).
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