The True Cost of Employee Health Benefits

During World War II, companies were having a tough time finding well-qualified employees due to wage and price controls. Salaries were artificially kept low, and to solve the problem employers began to offer benefits including health and life insurance, better pensions, and more vacation time to attract employees.

As time went on, employees began to take these benefits for granted. Union leaders took the reigns and bullied employers into providing benefits that could not be sustained. Employees were brainwashed into thinking that employers had to provide benefits. The problems began. (Reference GM net profit margin: -25.85% TTM)

So, what does an employer do?

If you’re an employer who needs to cut costs, you pick a target. Right now, smokers seem to be at the center of the bullseye. On Tuesday, the San Francisco Chronical posted an article written by Victoria Colliver – Employers Ponder Tougher Tactics to Halt Smoking. (Emphasis added)

Howard Weyers tried the “carrot” approach by giving his employees incentives and encouragement to quit smoking. But when that didn’t work, he resorted to the stick. A big stick.

Weyers, owner of a health care benefits administrator in Lansing, Mich., gave his 200 employees an ultimatum in 2004: Quit smoking in 15 months or lose your job. He refused to hire smokers. Ultimately, he extended his smoking ban to employees’ spouses and monitored compliance through mandatory random blood testing.

Note to readers: If you did not know, It is still legal to buy and smoke cigarettes.

Do you think that Weyers cares about the health of his employees and their spouses? I’m certain that he does, but he also cares about company profits. Health insurance premiums are not cheap; costs are rising yearly.

LanceKate’s Diary at RedState puts out the question. When does an employers rights end?

Smoking is a good indicator where our rights are going as smoking has been deemed as evil (and anyone who smokes is a second class citizen, more or less). … What is next? An employer saying that you are not allowed to own guns at home and they’re going to randomly check your home?

Why not target a “bigger” group? There is a clear standard out there – provided by big groups of medical professionals – that defines obesity.

Those who are overweight burden the health care system with higher costs. Many medical conditions are tied to obesity including diabetes, high blood pressure and arthritis. They, like some smokers, are assumed to be frequent users of the health care system and increase the prices for everyone.

Maybe a scale at the employer’s front door is in order? Stop to scan your entry badge, and they can check your weight at the same time. If you’re overweight, you can be confidentially notified in your next pay stub.

These policies over time really do detail the true costs of employee health benefits. How far will employers be able to go to force employees to be healthy? To me, those wage controls implemented during World War II are looking like a big mistake.

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