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

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.