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March 16, 2016

The Costly Truth of Obesity

Why companies should be concerned about obesity in the workplace

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Obesity is sweeping the United States, endangering the health of employees. Obese employees are more likely to get injured while at work, costing employers significantly more in workers’ compensation costs than their healthy coworkers.

Over the past 10 years, workplace injuries caused by environmental conditions have slowly and consistently dropped in the United States. This is attributable to the recent trend of making workplace safety an organization’s top priority. However, the cost of Workers’ Compensation insurance hasn’t decreased with the same consistency.

Rising medical costs are often attributed to the deteriorated physical condition of employees, and those who are injured are taking longer to recover, driving up the expense of claims. Obesity is one major factor. As such, wellness needs to be incorporated into safety programs in order to effectively inspire workers to make better and healthier lifestyle decisions. The combination of wellness and safety is a newer, more effective approach for reducing future workers’ compensation and health insurance costs, while also improving the wellbeing of employees

Necessary for Employers
Why should companies be concerned about obesity in the workplace? Here’s the facts:

  • More than 68.5% of adults are overweight or obese  
  • Nearly 40% of middle-aged adults, ages 40 to 59, are obese
  • Obesity-related costs make up nearly 20.6% of all U.S. medical costs per year
  • Obese people spend 42% more on healthcare costs
  • Almost 80% of people with type 2 diabetes are overweight
  • Obesity in the workplace carries over to the home – 1.5x higher health expenses for obese children covered by private insurance

Big Financial Costs
Obese employees have additional medical costs for health insurance because of the conditions that arise from being overweight. In addition, these increased medical costs are prevalent in workers’ compensation insurance. Those struggling with obesity are more likely to require a longer time to heal away from work, which dramatically affects indemnity costs.

But, it’s not as simple as just medical and workers’ compensation costs. There are several areas of additional costs common with obese workers. Take a look at the comparison with healthy workers:

  • Number of work-related injuries – 25% higher
  • Number of workers’ compensation claims – 2x more claims filed
  • Cost of workers’ compensation medical claims – 7x higher
  • Cost of workers’ compensation indemnity claims – 11x higher
  • Healthcare costs – 42% higher
  • Absenteeism – 10x more days off from work injury or illness
  • Productivity – $506 per obese employee per year
  • Diabetes – $7,900+ in medical costs per employee

To download the complete whitepaper on The Costly Truth of Obesity by Assurance, please click the button above.