Employees are paying for poor health habits.

Realizing that corporate America may have limited control over how and when medical services are delivered, employers are beginning to attack the demand side of the health-care equation. That is, improving employee health status should result in a lower demand for medical services. However, to realize significant medical-claims savings, employers must encourage the least healthy employees both to enroll in work-site health-promotion programs and to permanently change their health-risk behaviors. One way to accomplish these objectives is to shift more financial risk onto employees by redesigning the company's medical benefit plan. As the 1990s progress and as medical costs continue to spiral upward, we are bound to observe greater employer involvement in employees' life-styles, both at work and at home. The bounds of discrimination and privacy laws will be tested as companies employ more restrictive policies and benefit plan designs to encourage employees to modify current poor-risk behaviors.