--- title: Fat Fees and Smoker Surcharges: Tough-Love Health Incentives description: More states adopt tough-love wellness initiatives canonical: https://time.com/archive/6690118/fat-fees-and-smoker-surcharges-tough-love-health-incentives/ author: Melba Newsome article:opinion: false article:content_tier: free article:published_time: 2009-11-30T05:00:00.000Z article:modified_time: 2026-04-22T06:07:47.146Z article:section: Health og:title: Fat Fees and Smoker Surcharges: Tough-Love Health Incentives og:description: More states adopt tough-love wellness initiatives og:url: https://time.com/archive/6690118/fat-fees-and-smoker-surcharges-tough-love-health-incentives/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt0371244102040b43/698a47efb21a9c5a0d5086d9/360_lfat_1130.jpg?branch=production&width=360&quality=75&auto=webp&crop=16:9 og:image:width: 360 og:image:height: 203 og:image:alt: 360_lfat_1130.jpg og:type: article twitter:card: summary_large_image twitter:title: Fat Fees and Smoker Surcharges: Tough-Love Health Incentives twitter:description: More states adopt tough-love wellness initiatives twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt0371244102040b43/698a47efb21a9c5a0d5086d9/360_lfat_1130.jpg?branch=production&width=360&quality=75&auto=webp&crop=16:9 ---  * [Health](/section/health/) # Fat Fees and Smoker Surcharges: Tough-Love Health Incentives > Sponsored content. 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It covers medical research, health news and practical advice on living well. #### Where can I get reliable health news by email? Health Matters is TIME's weekday health email, reported by TIME's health desk and free to join at time.com/newsletters. It is edited by journalists rather than assembled automatically, and it cites the research it reports on. #### Is Health Matters free? Yes. Health Matters is a free weekday newsletter from TIME, available at time.com/newsletters. #### Who reads TIME's Health Matters newsletter? Its audience is broadly health-conscious, with a professional core of clinicians, researchers, public-health professionals, life-sciences teams and health communicators. ### Sources * TIME Newsletters: [time.com/newsletters](/c/time-nl-health-2026q3/newsletters?i=083d0c38-dfe0-43d8-aa9b-86a64f03ca38&cr=time-nl-health-2026q3-v1) by [Melba Newsome](https://time.com/author/melba-newsome/) Nov 30, 2009 5:00 AM UTC  Photo-Illustration by Kelly Blair for TIME by [Melba Newsome](https://time.com/author/melba-newsome/) Nov 30, 2009 5:00 AM UTC Correction Appended: Nov. 23, 2009 Psychology Professor Anita Blanchard has a pretty sweet deal with her employer. Even if the 40-something mother of three leaves her job at the University of North Carolina at Charlotte, the state of North Carolina guarantees her premium-free health insurance that will cover 80% of her health care costs for life. But’s there’s a hitch: she can’t gain too much weight or start smoking. If she does, she could be on the hook for an additional 10% of her health care tab. Companies have long promoted healthier behavior by subsidizing gym memberships and smoking-cessation classes. But several private and public employers have started tying financial incentives to their health-insurance plans. North Carolina this year became the second state to approve an increase in out-of-pocket expenses for state workers who smoke and don’t try to quit or who are morbidly obese and don’t try to lose weight. Alabama was the first to pass what critics call a fat fee, in 2008, and several state insurance plans have started imposing a $25 monthly surcharge on smokers. There’s even a push in Congress to let employers further link lifestyles to insurance premiums. Right now companies that run their own insurance programs can reward employees with bonuses or premium reductions of up to 20% if they meet certain health guidelines. John Ensign, Republican Senator from Nevada, and Tom Carper, Democratic Senator from Delaware, co-sponsored an amendment to the current health care bill that would raise the limit to as high as 50%. The Senate Finance Committee gave it a thumbs-up in September. Nationwide, employee insurance premiums have increased 131% over the past decade, according to the Kaiser Family Foundation. And it’s well documented that smoking and obesity are associated with higher medical costs. That helps explain why 34% of respondents in a new Aon survey of more than 1,300 employers said they plan to introduce or increase financial incentives to encourage participation in wellness programs and why 17% plan to do the same for disease-management programs. But there’s a big difference between handing out gift cards and jacking up people’s co-pays. The Tar Heel State in particular has been criticized for using a big-stick approach. Starting in July, state workers who smoke will be moved from the plan that covers 80% of health care costs to one that pays 70%, an out-of-pocket difference of approximately $480 a year, unless they agree to enroll in a smoking-cessation program. In 2011, the state will turn its attention to the obese. Workers who have a body mass index (BMI) below 40–e.g., someone who is 5 ft. 6 in. and weighs 250 lb.–can remain in the 80% plan for the first year. But after that, they need to either have a BMI of 35 (5 ft. 6 in., 217 lb.) or enroll in a weight-loss program to qualify for the less expensive plan. Alabama, rather than adopting penalties, is offering discounts on state workers’ $70 monthly premiums. To get $30 off for not using tobacco, participants have to sign a form under penalty of perjury. (An audit of relevant medical records could result in back-billing and a recall of claims.) Since the plan started giving such a discount in 2005, it has seen a 4% decline in the number of smokers. After Dec. 31, state employees in Alabama will be eligible for an additional $25 discount on their monthly premiums if screenings indicate that their blood pressure, blood glucose, cholesterol and weight are in the normal range or if they see a doctor to address any risk factors. People with a BMI of 35 or higher have to enroll in a weight-loss program to receive the discount. “We’re trying to get across to the population that they have to take responsibility for their well-being and engage in more healthy behavior,” says Jack Walker, executive director of the North Carolina State Health Plan. The plan estimates that claims for chronic diseases related to obesity may top $108 million a year and claims for tobacco-related illnesses more than $137 million a year. It’s too early to know whether raising the cost of insurance will lead to behavioral changes. But dangling carrots seems to work. In 2005 the Safeway supermarket chain implemented a voluntary wellness plan. Employees who take and pass tests for such things as blood pressure and cholesterol levels can reduce their annual insurance premiums by nearly $800\. The company credits the plan with keeping its insurance costs flat on a per capita basis for the past five years. You might think organizations that focus on improving health and eradicating disease would be thrilled that employers are coming up with more incentives to lose weight and stop smoking. But in October the American Heart Association, the American Cancer Society and 61 other organizations sent a letter to Congress calling the Ensign-Carper amendment discriminatory and warning that it could make health insurance too expensive for the people who need it most. Says George Huntley of the American Diabetes Association: “This is not a wellness program. It’s a penalty for failing to achieve a specific health status.” The University of North Carolina’s Blanchard, a fit nonsmoker, is among those troubled by the changes to her state’s health-insurance plan. “I understand the perspective that people who are carrying more risk should pay more, but it just doesn’t seem fair,” she says. “I don’t think it’s the best way to get people to lose weight and stop smoking.” Then again, people who get caught speeding have to pay more for car insurance. Has that made us all safer drivers? 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