http://money.cnn.com/2007/08/28/smbusiness/cutting_copays.fsb/index.htm?pos
tversion=2007090618

A new solution to the obesity crisis?

Employers can now cut insurance co-pays for workers who follow healthier
lifestyles.
By Ian Mount
September 6 2007: 6:37 PM EDT

(FSB Magazine) -- Midwestern hospital operator Clarian Health caused a stir
when it announced that next year employees who smoke will be assessed $5
per paycheck in extra insurance co-payments, and that in 2009 it will
extend the penalty to workers with high cholesterol, blood pressure and
blood glucose; obese employees will be charged $10 extra.

Final federal rules for such programs went into effect in July, giving
employers firm legal footing to push workers into healthier lifestyles. Rex
Materials, a $20-million-a-year maker of insulation in Fowlerville, Mich.,
has proved the programs work. In 2005 President David Rex offered to cut
premium co-pays $10 a week, or about 20 percent, for workers on the PPO
plan who undergo a health-risk assessment.Those who maintained a minimum
rating or raised their scores closer to the cutoff by taking steps, such as
quitting smoking or lowering blood pressure, kept the discount.

In 2006, when the average small firm saw health premiums rise 8.8 percent,
Rex had no increase. Sharon Cohen, health-care benefits counsel at Watson
Wyatt Worldwide, says Rex's carrot beats Clarian's stick. "Positive
reinforcement always works better," she says.