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Group Health Plans Raising Premiums for Unhealthy Members

November 4, 2011

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A recent article in the Insurance Journal discussed how companies are beginning to focus on cutting health care costs with regards to group health plans. The article explains that a growing number of companies have begun to encourage workers to voluntarily improve their health and well being to control rising insurance costs. The need for such increase in premiums is highlighted by the statistic that tobacco users consume about 25% percent more healthcare services than non-tobacco users.
With such clear evidence that bad health habits cost companies money, Wal-Mart for example states that in 2012 they will charge tobacco users higher premiums for their health coverage.
The programs designed to charge unhealthy members higher premiums so far have met little resistance in Court. However, companies are still bound by the 1996 Health Insurance Portability and Accountability Act (HIPAA) which prevents workers from being discriminated on the basis of health. While employers do have the right to alter premiums based on the health of members, they do need to provide alternatives to workers who cannot make health changes.
While some argue that wellness programs and company intervention in the health of their members is unlikely to work, considering the cost of health insurance, some changes are certainly needed to maintain revenues through these tough economic times.
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Thanks to Andrew Marra for his contribution to this post

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