February In-The-Know

New Study Reveals Impact on Employers Benefits Costs

A new study conducted by Health Action Council (HAC) in collaboration with UnitedHealthcare highlights the consequences of the effects on both employee health and employer costs. The study analyzed claims data from more the 220,000 employees of HAC members covered by UnitedHealthcare. Obesity has been rising steadily and is a major driver of rising health care costs. Of the research sample, 26% were diagnosed with obesity, yet they account for almost half of the total health care spend. A 2024 congressional report found that obesity will create up to $9.1 T in excess medical expenditures over the next decade. These elevated costs include a 66% increase in out-of-pocket expenses for individuals with obesity. Furthermore, in terms of health care costs, a member living with obesity is aged by 27 years.

If the adult obesity rate rises to 49% by 2030 (as projected) the additional cost borne by HAC plan sponsors and their employees would surge to $500 M. If obesity rates among HAC members had stayed the same as they were in 2010, total spending in 2023 would have been $54.3 million lower (a 5% reduction). Savings could be generated if members prevent the development of obesity. If 25% of HAC members with obesity had not progressed to living with it, annual savings would reach $74 million. Additionally, if 10% of HAC members avoided obesity, annual savings could total $30 million.

Generational Trends

Obesity rates have risen dramatically among Millennials, women of childbearing age, and children of parents with obesity. With higher PMPM spending observed in younger generations, your employer clients must prepare for potentially higher health care costs across their younger workforce due to the higher rates of obesity. According to HAC data, children born to mothers with obesity are more prone to developing obesity later in life and are also more likely to be higher utilizers of care, translating into higher costs. Children of adults with obesity are also at greater risk for a range of other health issues, including asthma, diabetes, and behavioral health problems. These children are twice as likely to have high cholesterol and hypertension.

This intergenerational impact is especially concerning as the obesity gender gap widens among millennial women—many of whom are in their childbearing years—making it critical for employers to understand the long-term implications of obesity on workforce health, especially as it crosses generational lines.

The Hidden Costs of Obesity

Obesity often brings with it a range of serious health issues that significantly impact both quality of life and healthcare expenses. Adults living with obesity are at a higher risk for chronic conditions like diabetes, high cholesterol, hypertension and certain cancers. Beyond physical health, individuals with obesity are also more prone to mental health challenges, including significantly higher rates of anxiety (33% higher), depression (61% higher), substance use (50% higher), and eating disorders (87% higher).

Higher utilization leads to decreased productivity. Adult members living with obesity use healthcare services at significantly higher rates than those without obesity, which not only drives up average costs but also results in more time away from work. These members also visit the emergency room nearly twice as often (1.8x) and see their doctors more than twice (2.3x) as frequently, resulting in lost productivity. Specifically, adult members with obesity accounted for over 155,000 hours lost to ER visits and over 2 M hours lost due to physician visits annually. There is a silver lining, however - individuals with obesity are often more engaged in healthcare, showing a tendency to make better care decisions.

Strategies for Employers to Address Obesity and Improve Workforce Health

Reducing obesity rates can help prevent chronic conditions and boost productivity. Employers need to adopt a comprehensive, holistic approach to weight management that goes beyond medication, addressing the issue from all angles. While the causes are complex, obesity is preventable, and employers have a critical role to play in supporting healthier behaviors among their workforces. Creating healthier workplaces will help employees improve their lives and possibly avoid obesity.

You can help your clients create a healthier workplace by:

• Understanding their population: Analyze claims data to assess what percentage of employees and their dependents are impacted by obesity.
• Educating them on resources that could offer rotating classes on exercise, nutrition, and mindfulness. Our Spring Step It Up Challenge, a no-cost four-week step program happening March 17 - April 13, is a great way to boost employee well-being and workplace camaraderie.
• Identifying opportunities to create team-building activities, such as establishing a community garden, where employees can contribute their time and labor, and receive the harvested crops at a minimal cost or in exchange for their efforts.
• Coordinating with local vendors: Work with local grocers or food distributors to label foods that promote better health and wellness.

Ultimately, your clients need to focus on key cost drivers and think creatively about how to reduce risks while supporting their employees and families. By crafting strategic plans based on workforce data and emerging opportunities, they can play a central role in managing the growing obesity crisis.