Your Badonk and Cancer Sticks Will Cost You Under Affordable Care

How you'll be charged higher premiums for unhealthy lifestyles.
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NEW YORK (MainStreet)—In an effort to reduce the burden of chronic illness, improve health and limit growth of health care costs, the federal government issued its final rules on employment-based wellness programs today to implement the new healthcare law.

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Beginning January 2014, the rules increase the allowable size of health-contingent wellness program rewards -- or penalties, depending on your point of view -- in the workplace from 20% to 30% of the premium, and up to 50% of the premium for programs that target tobacco-use.

If you don't reach the goal, you don't get the incentive, therefore you're charged more than thin, nonsmokers, whose premiums start at the incentivized rate, says Joel Winston, a former deputy attorney general for the state of New Jersey and founder of, an organization aimed at improving privacy protections for personal medical information. This may create an additional level of stress, he says.

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More employers are imposing tougher requirements to earn financial rewards -- or avoid financial penalties -- using outcomes-based incentive designs. A survey conducted by Towers Watson and the National Business Group on Health found that tobacco-use surcharges continue to rise with 35% of companies surveyed using them in 2012 and 42% in 2013. By 2014, the number of companies is expected to reach 62%.

This new regulation doesn't supersede state law that protects against discrimination, according to senior administration officials.

--S.Z. Berg is the author of College on the Cheap.

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