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Can Your Employer Penalize You for Being Fat?

By Kerri Fivecoat-Campbell

NEW YORK (MainStreet)--The announcement this spring that CVS Pharmacy will require its employees who participate in its health insurance plan to submit to health testing or face higher premiums has consumer advocates asking just how far employer sponsored health insurance companies will be allowed to go when delving into the personal information of employee participants. It also begs the question of how legal it is.

The plan requires employees to submit their cholesterol, blood pressure and blood sugar levels. Possibly the most controversial of the personal information is that of weight and BMI, or Body Mass Index.

"These changes aren't just about costs, they're about us, each of us taking personal accountability for our own health," Lisa Bissacia, senior vice president and chief human resources officer for CVS Pharmacy said in a video statement.

Employees who refuse to participate in the program will have to pay a $600 per year higher premium.

Health incentives aren't a new idea, various wellness programs have been around the corporate world for many years, but they were meant to encourage a healthier lifestyle and levyed no financial penalty for employees who didn't care to participate.

The wellness program eventually evolved into tobacco-free programs, many of which imposed a higher health insurance premium for those who use tobacco products.

According to a Kaiser survey conducted in 2012, 18% of employers now ask for a health risk assessment from their employees.

"It is absolutely legal with regards to the question of asking for BMI," says Brad Leddon, vice president of the employee benefits division for Coffey & Company. "But the mechanics are often misrepresented in the media."

Leddon says that many of the stories frame the extra money people who don't participate in the program as a "penalty," rather than framing it as a "savings" for the employees who participate.

"Law allows an employer to offer rewards for participation in a wellness program," says Leddon.

Leddon says that there are criteria with regards to the amount of the reward, as well as basing the reward on participation and not outcome. "You can have a smoking cessation program, but can't base the payment of the rewards on the participant actually quitting," says Leddon.