The Association between Employee Obesity and Employer Costs: Evidence from a Panel of U.S. Employers

Abstract

Purpose.

To estimate the employer costs associated with employee obesity.

Design.

The study used cross-sectional analysis of employee health-risk assessment, disability, workers' compensation, and medical claims data from 2006 to 2008.

Setting.

The study took place in the United States from 2006 to 2008.

Subjects.

A panel database with 29,699 employees drawn from a panel of employers and observed for 3 years each (N = 89,097) was used.

Measures.

Workdays lost owing to illness and disability; the cost of medical, short-term disability, and workers' compensation claims; and employees' adjusted body mass indices (BMI) were measured.

Analysis.

We model the number and probability of workdays lost from illness, short-term disability, and workers' compensation events; short-term disability and workers' compensation payments; and health care spending as a function of BMI. We estimate spline regression models and fit results using a third-degree fractional polynomial.

Results.

Probability of disability, workers' compensation claims, and number of days missed owing to any cause increase with BMI above 25, as do total employer costs. The probability of a short-term disability claim increases faster for employees with hypertension, hyperlipidemia, or diabetes. Normal weight employees cost on average $3830 per year in covered medical, sick day, short-term disability, and workers' compensation claims combined; morbidly obese employees cost more than twice that amount, or $8067, in 2011 dollars.

Conclusion.

Obesity is associated with large employer costs from direct health care and insurance claims and indirect costs from lost productivity owing to workdays lost because of illness and disability.