Bacon Prices Are Falling

Bringing home the bacon is getting a little easier.

Prices of pork products are falling as herds bounce back from a diarrhea-inducing virus epidemic that has killed millions of piglets over the last year, according to data from the U.S. Department of Agriculture.

Hog futures -- contracts that obligate the buyer to purchase pigs at a certain price in the next month -- peaked last March at $1.1167 a pound. Now, next month’s futures are priced at about 69 cents per pound, according to the trade group Chicago Mercantile Exchange.

“Pork prices are getting cheaper,” Terry Roggensack, who co-founded the commodities research firm the Hightower Report, told The Huffington Post on Tuesday. “It’s a positive.”

This chart, courtesy of Index Mundi, shows pork prices declining since October.

The number of deaths linked to the Porcine epidemic diarrhea virus, or PEDv, isn’t the only thing making things less expensive, Roggensack said.

The strength of the U.S. dollar and tumult in Russia sent exports tumbling to about 18 percent from a peak of 26 percent earlier last year, according to Roggensack's data. But the number of hogs being slaughtered rose to 2.316 million last week, a 4.6 percent gain from the same period last year. Unlike other commodities, such as gold, copper or crude oil, only a fraction of pork is frozen and stored for later use.

“For the most part, you’ve got to use it within a month or so of when it’s produced,” Roggensack said. “The domestic market needs to absorb an even bigger supply than it normally would.”

And how do you entice people to buy more of something? Make it cheaper.

How To Score A Free Burrito At Chipotle This January

While winter sinks deeper into a seemingly interminable cold and wet darkness, there is a light at the end of the month. On Monday, January 26, you can earn yourself a free burrito at Chipotle.

To do so, you'll have to buy an entree off the Sofritas menu on that Monday. Then, when you bring your receipt to a Chipotle between January 27th and February 28th, you'll be rewarded with a free burrito, bowl, salad, or taco order of your choosing (yes, you can go back to meat if you want).

Chipotle first introduced Sofritas -- its vegan, braised tofu option -- early in 2013. If you're tofu-averse, know that the filling reportedly tastes a lot like scrambled eggs. That doesn't sound so bad, does it?

If you really can't handle the idea of eating bean curd but want to score that free burrito, you could always pluck out the protein and toss it to your dog. This way, everyone wins.

H/T: FoodBeast

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Workers Sue McDonald's For Discrimination, Opening New Front In Franchise Fight

A group of former McDonald's workers from Virginia are suing their stores for racial discrimination and sexual harassment -- and they're taking the rare step of naming the world's foremost fast-food company as a defendant in the suit.

The 10 plaintiffs -- nine of whom are African-American, and one of whom is Hispanic -- say they were wrongfully fired last year and replaced with mostly white workers because their managers believed there had been "too many black people [working] in the store." The lawsuit (viewable here) alleges that women were harassed and groped and that minorities were subjected to racist taunts. It also claims that managers referred to one restaurant as "the ghetto store."

Although it's usually just franchisees that are sued under discrimination claims, in this case the plaintiffs are arguing that McDonald's itself should be held responsible for the actions inside a franchised store. They say the fast-food giant should have to pay damages because it sets companywide policies and has the power to enforce them.

"In order to maximize its profit, McDonald's Corporate has control over nearly every aspect of its restaurants' operations," the lawsuit asserts. "Though nominally independent, franchised McDonald's restaurants are predominantly controlled by McDonald's."

The plaintiffs in the suit have received legal assistance from the NAACP and the group Fight for $15, which advocates on behalf of fast-food workers. According to the suit, the plaintiffs had a combined 50 years working at McDonald's restaurants, 25 of them accrued by a 53-year-old shift manager who lost her job in July. The rest of the workers lost their jobs in a mass termination in May.

As the South Boston (Virginia) News & Record reported at the time, a total of 17 workers were abruptly fired from three McDonald's restaurants in the area. All three locations were run by Michael Simon, owner of Soweva, the company that franchised the stores. At the time, workers told the paper they were informed they "didn't fit the profile" that the company was looking for in its restaurants.

"Most, though not all, of the terminated employees are African-American," the paper noted. "Most of the workers who remain on the job at the local McDonald’s also are black. So, too, is [Soweva owner] Simon."

In the lawsuit, the plaintiffs say that their white supervisors wanted to drop black workers from the payrolls because the stores were "too dark," in a phrase attributed to one manager.

"I had no idea what they meant by the right profile until I saw everyone else that they fired as well," Willie Betts, one of the plaintiffs, said in a statement Thursday. "They took away the only source of income I have to support my family."

Simon did not immediately respond to a request for comment. In a statement at the time of the firings, Simon denied that race was a factor, saying his company "has a strict policy of prohibiting any form of discrimination or harassment in hiring, termination or any other aspect of employment."

In the lawsuit, the workers allege that when they brought their concerns to McDonald's corporate, the company "took no actions to remedy" the firings. The workers are now seeking damages from the chain under Title VII of the Civil Rights Act, which prohibits employment discrimination on the basis of race, color, religion or sex.

"We asked McDonald’s corporate to help us get our jobs back, but the company told us to take our concerns to the franchisee -- the same franchisee that just fired us," Pamela Marable, another plaintiff, said in a statement this week.

“We have not seen the lawsuit, and cannot comment on its allegations, but will review the matter carefully," McDonald's said in a statement Thursday.

"McDonald’s has a long-standing history of embracing the diversity of employees, independent Franchisees, customers and suppliers, and discrimination is completely inconsistent with our values," the company's statement continued. "McDonald’s and our independent owner-operators share a commitment to the well-being and fair treatment of all people who work in McDonald’s restaurants.”

The lawsuit in Virginia is just the latest salvo in a broader fight against the franchise model. McDonald's franchises roughly 90 percent of its stores, leaving the day-to-day operations to individual franchisees like Soweva. Since the franchisees run the stores, they're the ones that tend to get sued when labor law is broken. That's a major upside of the franchise model for companies like McDonald's.

But unions and worker groups have been arguing in court and before agencies like the National Labor Relations Board that big chains such as McDonald's should be held accountable for the working conditions inside the stores that bear their names.

Until now, that generally hasn't been the case. But that could be changing on some fronts. The NLRB's general counsel, for instance, has named McDonald's as a "joint employer" alongside several of its franchisees accused of violating labor law during the fast-food strikes. If the agency were to view the workers as employed under one big umbrella -- rather than by hundreds or thousands of individual franchisees -- it would be much easier for the workers to unionize en masse. As it is, the fact that McDonald's workers are technically employed by different franchisees means they would have to be unionized store by individual store.

Several lawsuits currently seek to hold McDonald's responsible for wage theft allegedly committed by its franchisees. As with the discrimination complaint in Virginia, the plaintiffs in those suits argue that McDonald's ultimately exerts control over the operations inside individual stores, and that it should be held accountable when the law is broken.

Your Chipotle Could Be Getting Carnitas Back Soon

Carnitas lovers rejoice! (Sort of.)

Finding carnitas during the ongoing Chipotle pork shortage may not be as hard as you originally thought. The Mexican chain is rotating the menu item through all of its restaurants, according to Chris Arnold, a Chipotle spokesman. Though one-third of its restaurants won't be selling carnitas until the shortage ends, that one-third will change periodically, so no restaurants are out of the protein for "extended periods," Arnold wrote in an email.

Chipotle suspended sales of carnitas last week after discovering that one of its pork suppliers wasn’t meeting its standards for responsibly raised meat. The news that the hottest fast food chain in the country was out of one of its few menu items made headlines, with carnitas fans taking to Facebook and Twitter to ask when the protein would be coming back.

When chipotle is out of carnitas pic.twitter.com/gVYZcIAP6N

— abby bova (@abby_bova) January 10, 2015

A carnitas fan mourns the loss.

The announcement also reminded Chipotle fans why they’re drawn to the chain in the first place. The burrito chain’s popularity has skyrocketed in recent years, in part because it sells itself as a fast food restaurant with a conscience -- hawking humanely raised meat and sustainably grown beans. At the same time, traditional fast food chains like McDonald’s are struggling to draw diners into their stores.

Despite Chipotle’s success, the carnitas shortage, which is now in its second week, highlights the challenges of running a large chain committed to serving humanely raised meat when there isn’t a lot of it out there.

Carnitas only make up about 6 percent of the entrees chipotle sells, Arnold said. The spokesman had some advice for those die-hard carnitas fans who want to make sure their local Chipotle is carrying the pork:

“The best way to know for sure would be to go.”

This Guy Just Made $1 Billion Betting On Oil Prices

You know what's cool? An oil-price collapse that saves you a few dollars when you fill up the Escalade. You know what's cooler? An oil-price collapse that makes you ONE BILLION FREAKING DOLLARS.

A hedge fund called PointState Capital is currently enjoying that second state of cool, Bloomberg reported on Wednesday. The New York firm has made a $1 billion profit from betting that crude oil would crater, according to the report.

In hindsight, it does seem like a pretty no-duh bet to make. Way back in May 2014, Bloomberg notes, PointState CEO Zach Schreiber publicly laid out a simple case for crude's impending collapse. Schreiber correctly noted that oil and gas producers in the U.S. were pumping too much oil out of the ground and setting up a huge price decline -- in other words, rapidly strangling the goose that was, at the time, laying golden oil-filled eggs.

Since Schreiber's presentation, crude has fallen from roughly $100 a barrel in May to less than $50 a barrel this week. Bada bing, bada boom, make a billion dollars. So easy.

PointState started out with a relatively meager $5 billion in 2011, founded by alumni of a much bigger hedge fund run by a more famous hedge fund manager, Stanley Druckenmiller. Now its leader, Schreiber, who used to quietly trade oil and other commodities for Druckenmiller, is suddenly at real risk of becoming a rock-star hedge fund genius whose every move is followed obsessively.

But everybody's a genius in hindsight. Foresight is a lot harder. Untold scores of hedge funds took the opposite bet of PointState and got themselves slaughtered.

A PointState representative did not immediately respond to The Huffington Post's request for confirmation or comment.

The hedge funds who made the wrong call aren't the only ones suffering: The U.S. oil and gas producers Schreiber mentioned are starting to make layoffs and production cuts.

It's worth noting that Schreiber got an unexpected assist from OPEC, which decided in November to stand back and watch oil prices go straight to hell, hoping to squeeze out some U.S. producers. Almost nobody expected that to happen -- it's possible that even Schreiber didn't see it coming. He didn't mention it in his May presentation, Bloomberg points out.

This is not the first big hedge fund win that seems obvious in hindsight. Most famously, John Paulson, founder of Paulson and Co., made between $3 billion and $4 billion in a single year betting on the subprime mortgage collapse that everybody should have seen coming.

These guys make it look so easy that they inspire others to invest their money in hedge funds, or even to start their own. The trouble is that most hedge funds are big failures, unable even to keep up with the broader stock market.

It's not as easy as the geniuses make it look -- even for the geniuses. Paulson's ride since the financial crisis hasn't been bump-free; he took massive losses in 2011 and 2014 on big bets gone wrong. The list of huge hedge fund disasters is at least as long as the list of huge hedge fund wins.

For Schreiber, now comes the hard part. Though that $1 billion should ease the way a bit.

What Obama Didn't Say About Rising Wages

By Jason Lange

WASHINGTON, Jan 20 (Reuters) - When President Barack Obama called attention on Tuesday to rising U.S. wages, he noted employers had not planned so many raises in years. But what he left out is that government data suggests actual wage increase are stuck in low gear.

"Today, thanks to a growing economy, the recovery is touching more and more lives," Obama said in his annual State of the Union address.

The president was not entirely triumphant in his speech, calling on Washington to help lift more Americans out of poverty by raising the minimum wage. He also said reforms to the country's education system were needed to help more people get high-paying jobs.

But in making a case that America had broken out of the economic doldrums, he said: "Wages are finally starting to rise again."

While it is true that earnings are rising, the problem with that statement is that multiple government surveys suggest income growth remains much slower than before the 2007-09 recession.

Average hourly earnings in the private sector rose just 1.7 percent in the year through December, according to the U.S. Labor Department.

On the eve of the recession, which began in December 2007, earnings were growing more than 3 percent every 12 months. Since 2010, they have averaged about 2 percent growth.

Obama also noted that a bigger share of small-business owners planned to raise wages than at any time since 2007.

That was an apparent reference to data from the National Federation of Independent Business from December, which genuinely lifted hopes workers were poised to get a pop in their paychecks.

But even relatively upbeat data on actual earnings suggests workers are not getting much in the way of raises.

A separate Labor Department survey on employment compensation showed wages growing 2.1 percent in the third quarter compared with a year earlier. That was the fastest pace since 2009, but still well below growth rates in 2007, when they were consistently above 3 percent. (Reporting by Jason Lange; Editing by Peter Cooney)

Leaked Report Says World Bank Violated Its Own Rules In Ethiopia

This article was reported by the International Consortium of Investigative Journalists, a Washington DC-based global network of 185 reporters in 65 countries who collaborate on transnational investigations.

Internal watchdog finds link between World Bank financing and Ethiopian government's mass resettlement of indigenous group

The World Bank repeatedly violated its own rules while funding a development initiative in Ethiopia that has been dogged by complaints that it sponsored forced evictions of thousands of indigenous people, according to a leaked report by a watchdog panel at the bank.

The report, which was obtained by the International Consortium of Investigative Journalists, examines a health and education initiative that was buoyed by nearly $2 billion in World Bank funding over the last decade. Members of the indigenous Anuak people in Ethiopia’s Gambella province charged that Ethiopian authorities used some of the bank’s money to support a massive forced relocation program and that soldiers beat, raped and killed Anuak who refused to abandon their homes. The bank continued funding the health and education initiative for years after the allegations emerged.

The report by the World Bank’s internal Inspection Panel found that there was an “operational link” between the World Bank-funded program and the Ethiopian government’s relocation push, which was known as “villagization.” By failing to acknowledge this link and take action to protect affected communities, the bank violated its own policies on project appraisal, risk assessment, financial analysis and protection of indigenous peoples, the panel’s report concludes.

“The bank has enabled the forcible transfer of tens of thousands of indigenous people from their ancestral lands,” said David Pred, director of Inclusive Development International, a nonprofit that filed the complaint on behalf of 26 Anuak refugees.

Anuak children in Gorom Refugee Camp in South Sudan. Many Anuak fled Ethiopia during a government relocation campaign called "villagization". Photo credit: Andreea Campeanu/ICIJ.

The bank declined to answer ICIJ’s questions about the report.

“As is standard procedure, World Bank staff cannot comment on the results of the Inspection Panel’s investigation until the Executive Board of the World Bank Group has had the opportunity to review the Panel’s report over the coming weeks,” Phil Hay, the bank’s spokesman for Africa, said in a written response.

In previous responses to the complaint, bank management said there was no evidence of widespread abuses or evictions and that the Anuak “have not been, nor will they be, directly and adversely affected by a failure of the Bank to implement its policies and procedures.”

Because the panel’s report has not yet been published, some of the language may be revised before a final version is released, but its basic conclusions are not expected to change.

The report stops short of finding the bank responsible for the most serious abuses. The panel did not attempt to verify the widely reported allegations of forced evictions and human rights violations, finding that the question was beyond the scope of its investigation. The bank did not violate its policy on forced resettlement, the report says, because the relocations were conducted by the Ethiopian government and were not a “necessary” part of the health and education program.

Since 2006, the World Bank and other foreign donors have bankrolled the Promoting Basic Services program, which provides grants to local and regional governments for services such as health, education and clean water. The PBS program was designed to avoid funneling aid dollars directly to Ethiopia’s federal government, which had violently cracked down on its opposition after disputed 2005 elections.

By 2010, federal and provincial authorities had embarked on an effort to relocate nearly 2 million poor people in four provinces from isolated rural homes to village sites selected by the government. In these new villages, authorities promised to provide the relocated communities with health care, education and other basic services they had lacked.

The government relocated 37,883 households in Gambella, roughly 60 percent of all households in the province, according to Ethiopian government statistics cited by the Inspection Panel. The Ethiopian government has said that all resettlements were voluntary.

Many members of the Anuak, a mostly Christian indigenous group in Gambella, have said they didn’t want to move. Anuak and their advocates say that they were pushed off their fertile lands by soldiers and policemen, and that much of the abandoned land was then leased by the government to investors. The evictions were “accompanied by widespread human rights violations, including forced displacement, arbitrary arrest and detention, beatings, rape, and other sexual violence,” according to a 2012 report by Human Rights Watch.

The Human Rights Watch report and Anuak refugees’ complaint to the Inspection Panel contended that the bank’s money was being used by local and regional authorities to support forced relocations. For example, they say, money from the PBS initiative was used to pay the salaries of government officials who helped carry out the evictions.

The bank continued to fund the PBS program throughout the villagization campaign. The bank approved new funding for PBS in 2011 and 2012, and its support for the program continues today. Since the nationwide health and education initiative launched, Ethiopia has reported strides in reducing child mortality and increasing primary school enrollment.

The villagization campaign ended in 2013, and is believed to have resettled substantially fewer than the nearly 2 million people anticipated by the government.

The Ethiopia case is one of several recent World Bank-financed projects that have drawn fire from activist groups for allegedly funding human rights violations. These projects include a loan to a palm oil producer in Honduras whose security guards have been accused by human rights advocates of killing dozens of peasants involved in a land rights dispute with the company, and a conservation program by the Kenyan government that members of the Sengwer people say was used as tool for pushing them out of their ancestral forests.

In the Ethiopia case, the Inspection Panel decided that the most severe allegations of forced evictions and violence were beyond its mandate, in part because bank rules limited its investigation to only the most recent funding installment of the PBS program.

During its investigation, the Inspection Panel asked Eisei Kurimoto, a professor at Osaka University in Japan and an expert on the Anuak people, to travel to Gambella and help review the Anuak’s complaint.

Kurimoto told ICIJ that Anuak he spoke with told him Ethiopian authorities used the threat of violence to force them to move.

Ethiopian officials who carried out the villagization program “always went with armed policemen and soldiers,” Kurimoto said. “It is very clear that the regional government thought that people would not move happily or willingly. So they had to show their power and the possibility of using force.”

Inclusive Development International’s Pred said it is now up to World Bank president Jim Yong Kim to decide whether “justice will be served” for the Anuak. “Justice starts with the acceptance of responsibility for one’s faults – which the Inspection Panel found in abundance – and ends with the provision of meaningful redress,” he said.

Struggling Sears Canada Offers To Help Laid-Off Target Workers

Sears -- despite its own problems keeping its staff employed -- is riding to Target workers' rescue.

A day after Target announced plans to close all 133 of its locations in Canada, Sears Canada offered discounts to its competitors’ employees and invited them to apply for jobs at its stores.

“In recognition of the challenging retail landscape and yesterday’s announcement regarding the exit of Target from the Canadian market, Sears Canada wishes to do something meaningful to help employees affected by store closings and job losses and to do so in a respectful manner,” the company said in a statement on Friday.

Beginning next Wednesday and for the next four months, Target employees in the country can purchase products at Sears at a discount of up to 25 percent. Sears will also host job fairs across Canada. The retailer invited executives from Target Canada to meet Sears executives at the company’s Toronto headquarters next Wednesday to discuss potential openings.

Target did not respond to a request for comment on Saturday.

It’s a bold move by a retailer struggling to maintain its own workforce in its home country. Last month, Sears Holdings announced plans to shutter hundreds of Sears and Kmart stores in the U.S. as sales plummet. The closures prompted more than 8,000 layoffs as of November, according to the financial site Seeking Alpha.

“It’s a vulture move,” Brian Sozzi, a retail analyst and chief executive at Belus Capital Advisors, told The Huffington Post. “You have Sears trying to swoop in and prey on the emotions of people who just lost their jobs.”

Sears Canada has been one of Sears Holdings’ most troubled units. In October, the parent company announced a rights offering -- a move that allows shareholders to buy more stock of the company -- in an effort to generate up to $380 million in cash and decrease its stake in the business. The company already reduced its stake to 51 percent from 95 percent in 2012 as sales began to fall.

Sears’ business in Canada has fared slightly better than its fast-declining U.S. operation, but it isn’t far behind, Sozzi said.

“Sears Canada is dreadful,” Sozzi said of the business. “It’s almost a direct reflection of what’s going on here.”

Sears did not return a Saturday email requesting comment.

Fewer People Are Having Trouble Paying Medical Bills, Thanks To Obamacare

The number of Americans struggling to pay medical bills fell last year for the first time in nearly a decade -- the latest sign that Obamacare is making health care more affordable.

Sixty-four million people, or approximately 35 percent of the U.S. population, said they had trouble paying bills or were stuck paying off medical debt in the past year, according to a new survey by the Commonwealth Fund released on Thursday. That was down from 75 million people, or 41 percent of the population, in 2012. This marks the first time that figure has fallen since 2005, when Commonwealth started keeping track.

Commonwealth attributed the drop partly to expanded access to affordable health insurance made possible by Obamacare. The survey found that the number of uninsured Americans dropped to 29 million people last year, or 16 percent of the population, from 37 million, or 20 percent, in 2010.

The Commonwealth survey, which polled 6,027 U.S. adults in the second half of 2014, is in line with several other studies finding that the uninsured rate is falling.

“These declines are remarkable and unprecedented in the survey’s more than decade-long history,” Sara Collins, the lead author, said in a press release. “They indicate that the Affordable Care Act is beginning to help people afford the health care they need."

As the chart from Commonwealth shows, the percentage of Americans reporting problems paying off medical bills or medical-related debt rose from 2005 to 2012. Rising health-care costs, stagnant income growth and the aggressiveness with which providers go after people who haven't paid their bills all contributed to this growth, according to Commonwealth Fund president David Blumenthal.

The Affordable Care Act has reversed what had been a "deterioration" of the American health-care system, according to Blumenthal.

The survey also found that, for the first time since 2003, there has been a decline in the number of people putting off health care because of the cost. In 2012, a record 80 million people said they didn't visit a doctor or clinic for a medical problem, didn't fill a prescription, skipped a follow-up, treatment or test, or did not get needed specialist care, in order to avoid paying for it. That number fell to 66 million in 2014.

Medical-bill debt, which is often expensive and unexpected, can significantly harm people's credit ratings, as a recent study from the Consumer Financial Protection Bureau pointed out. Nearly 20 percent of credit reports are hurt by overdue medical bills.

Elon Musk Is Supposedly Building A Hyperloop Test Track

Elon Musk is supposedly building a test track for Hyperloop -- his futuristic high-speed transportation system that would carry people from Los Angeles to San Francisco in about 35 minutes.

The SpaceX founder and Tesla Motors CEO tweeted the following cryptic messages Thursday afternoon:

Will be building a Hyperloop test track for companies and student teams to test out their pods. Most likely in Texas.

— Elon Musk (@elonmusk) January 15, 2015

Also thinking of having an annual student Hyperloop pod racer competition, like Formula SAE http://t.co/HV9BLCoMb8

— Elon Musk (@elonmusk) January 15, 2015

Plans for Hyperloop were originally unveiled in 2013.

Obamacare Provision Is Hurting Workers Who Don't Join Wellness Programs

By Sharon Begley

U.S. companies are increasingly penalizing workers who decline to join "wellness" programs, embracing an element of President Barack Obama's healthcare law that has raised questions about fairness in the workplace.

Beginning in 2014, the law known as Obamacare raised the financial incentives that employers are allowed to offer workers for participating in workplace wellness programs and achieving results. The incentives, which big business lobbied for, can be either rewards or penalties - up to 30 percent of health insurance premiums, deductibles, and other costs, and even more if the programs target smoking.

Among the two-thirds of large companies using such incentives to encourage participation, almost a quarter are imposing financial penalties on those who opt-out, according to a survey by the National Business Group on Health and benefits consultant Towers Watson (For graphic see link.reuters.com/byr73w)

For some companies, however, just signing up for a wellness program isn't enough. They're linking financial incentives to specific goals such as losing weight, reducing cholesterol, or keeping blood glucose under control. The number of businesses imposing such outcomes-based wellness plans is expected to double this year to 46 percent, the survey found.

"Wellness-or-else is the trend," said workplace consultant Jon Robison of Salveo Partners.

Incentives typically take the form of cash payments or reductions in employee deductibles. Penalties include higher premiums and lower company contributions for out-of-pocket health costs.

Financial incentives, many companies say, are critical to encouraging workers to participate in wellness programs, which executives believe will save money in the long run.

"Employers are carrying a major burden of healthcare in this country and are trying to do the right thing," said Stephanie Pronk, a vice president at benefits consultant Aon Hewitt. "They need to improve employees' health so they can lead productive lives at home and at work, but also to control their healthcare costs."

But there is almost no evidence that workplace wellness programs significantly reduce those costs. That's why the financial penalties are so important to companies, critics and researchers say. They boost corporate profits by levying fines that outweigh any savings from wellness programs.

"There seems little question that you can make wellness programs save money with high enough penalties that essentially shift more healthcare costs to workers," said health policy expert Larry Levitt of the Kaiser Family Foundation.

FOUR-FIGURE PENALTIES

At Honeywell International, for instance, employees who decline company-specified medical screenings pay $500 more a year in premiums and lose out on a company contribution of $250 to $1,500 a year (depending on salary and spousal coverage) to defray out-of-pocket costs.

Kevin Covert, deputy general counsel for human resources, acknowledged it was too soon to tell if Honeywell's wellness and incentive programs reduce medical spending. But it is clear that the company is benefiting financially from the penalties. Slightly more than 10 percent of the company's U.S. employees, or roughly 5,000, did not participate, resulting in savings of hundreds of thousands of dollars.

Last year, Honeywell was sued over its wellness program by the Equal Employment Opportunity Commission. The EEOC argued that requiring workers to answer personal questions in the health questionnaire - including if they ever feel depressed and whether they've been diagnosed with a long list of illnesses - can violate federal law if they involve disabilities, as these examples do. And, if answering is not voluntary.

"Financial incentives and disincentives may make the programs involuntary" and thus illegal, said Chris Kuczynski, an assistant legal counsel at the EEOC.

Using the same argument, the EEOC also sued Wisconsin-based Orion Energy Systems, where an employee who declined to undergo screening by clinic workers the company hired was told she would have to pay the full $5,000 annual insurance premium.

SICK? PAY MORE.

Some vendors that run workplace wellness for large employers promote their programs by promising to shift costs to "higher utilizers" of health care services, according to a recent analysis by Joann Volk and Sabrina Corlette of Georgetown University Health Policy Institute - and by making workers "earn" contributions to their healthcare plans that were once automatic.

Consider Jill, who asked that her name not be used for fear of retaliation from the company. A few years ago, her employer, Lockheed Martin, provided hundreds of dollars per year to each worker to help defray insurance deductibles. Since it implemented its new wellness program, workers must now earn that contribution by, among other things, quitting smoking (something non-smokers can't do) and racking up steps on a company-supplied pedometer.

"Basically, if you don't participate in these programs, you have to pay something like $1,000 out of pocket for healthcare before insurance kicks in," said Jill.

Companies insist the penalties are not intended to be money-makers, but to encourage workers to improve their health and thereby avoid serious, and expensive, illness.

As evidence of that, said Honeywell's Covert, the company offers employees "easy ways to get out of" some of the wellness requirements, such as certifying that they do not smoke rather than submitting to a blood test.

BALANCING THE WELLNESS BOOKS

Why are companies so keen on such plans?

Most large employers are self-insured, meaning they pay medical claims out of revenue. As a result, wellness penalties also accrue to the bottom line.

About 95 percent of large U.S. employers offer workplace wellness programs. The programs cost around $100 to $300 per worker per year, but generally save far less than that in medical costs. A 2013 analysis by the RAND think tank commissioned by Congress found that annual healthcare spending for program participants was $25 to $40 lower than for non-participants over five years.

Yet at most large companies that impose penalties for not participating in workplace wellness, the amount is $500 or more, according to a 2014 survey by the Kaiser foundation.

"For economic reasons, most employers would prefer collecting the penalties," said Al Lewis, a wellness-outcomes consultant and co-author of the 2014 book "Surviving Workplace Wellness."

Lori, for instance, an employee at Pittsburgh-based health insurer Highmark, is paying $4,200 a year more for her family benefits because she declined to answer a health questionnaire or submit to company-run screenings for smoking, blood glucose, cholesterol, and blood pressure. She is concerned about the privacy of the online questionnaire, she said, and resents being told by her employer how to stay healthy.

Highmark vice president Anna Silberman, though, doesn't see it that way. She said the premium reductions that participants get "are a very powerful incentive for driving behavior," and that "people deserve to be rewarded for both effort and outcomes."

(This version of the story corrects name, Lorin Volk, in 16th paragraph, to Joann Volk)

(Reporting by Sharon Begley. Editor: Michele Gershberg and Hank Gilman)

Here's Where Obamacare Costs The Most

This post was originally published by Kaiser Health News (KHN). Kaiser Health News is a nonprofit national health policy news service.

In health insurance prices, as in the weather, Alaska and the Sun Belt are extremes. This year Alaska is the most expensive health insurance market for people who do not get coverage through their employers, while Phoenix, Albuquerque, N.M., and Tucson, Ariz., are among the very cheapest.

In this second year of the insurance marketplaces created by the federal health law, the most expensive premiums are in rural spots around the nation: Wyoming, rural Nevada, patches of inland California and the southernmost county in Mississippi, according to an analysis by the Kaiser Family Foundation, which has compiled premium prices from around the country. (KHN is an editorially independent program of the foundation.)

The most and least expensive regions are determined by the monthly premium for the least expensive “silver” level plan, which is the type most consumers buy and covers on average 70 percent of medical expenses. Premiums in the priciest areas are triple those in the least expensive areas.

Along with the three southwestern cities, the places with the lowest premiums include Louisville, Ky., Pittsburgh and western Pennsylvania, Knoxville and Memphis, Tenn., and Minneapolis-St. Paul and many of its suburbs, the analysis found.

Highest and Lowest Premiums
Here are the 10 most and least expensive regions in the country – with the counties listed in parenthesis – based on premium prices for the lowest-cost silver plan. Regions are counties that share the same price for the same lowest-cost-plan and are either geographically contiguous or are part of the same rating area created by the state.

Premiums are listed for 40-year-olds; and for most states the difference in prices stays the same for people of any age. Vermont and two upstate New York areas— Ithaca and Plattsburgh—also are among the 10 most expensive places, although those states do not let insurers adjust premiums based on the consumer’s age, making comparisons inexact. Older residents in those states will end up getting better deals than in most places, while younger ones tend to pay more.

10 HIGHEST PREMIUMS

1. $488 Alaska (entire state)
2. $459 Ithaca, NY (Tompkins)
3. $456 Bay St. Louis, Mississippi (Hancock)
4. $446 Plattsburgh, NY (Clinton)
5. $440 Rural Wyoming (Albany, Big Horn, Campbell, Carbon, Converse, Crook, Fremont, Goshen, Hot Springs, Johnson, Lincoln, Niobrara, Park, Platte, Sheridan, Sublette, Sweetwater, Teton, Uinta, Washakie, and Weston)
6. $428 Vermont (entire state)
7. $418 Rural Nevada (Churchill, Elko, Eureka, Humboldt, Lander, Mineral, Pershing, and White Pine)
8. $412 Casper, Wyoming (Natrona)
9. $410 Inland California (Imperial, Inyo, and Mono)
10. $401 Cheyenne, Wyoming (Laramie)

10 LOWEST PREMIUMS

1. $166 Phoenix, Ariz. (Maricopa)
2. $167 Albuquerque, N.M. (Bernalillo, Sandoval, Torrance, and Valencia)
3. $167 Louisville, Ky. (Bullitt, Jefferson, Oldham, and Shelby)
4. $170 Tucson, Ariz. (Pima and Santa Cruz)
5. $170 Pittsburgh, Pa. (Allegheny and Erie)
6. $179 Western Pennsylvania (Beaver, Butler, Washington, Westmoreland, Armstrong, Crawford, Fayette, Greene, Indiana, Lawrence, McKean, Mercer, and Warren)
7. $181 Knoxville and Eastern Tennessee (Anderson, Blount, Campbell, Claiborne, Cocke, Grainger, Hamblen, Jefferson, Knox, Loudon, Monroe, Morgan, Roane, Scott, Sevier, and Union)
8. $181 Minneapolis-St. Paul (Anoka, Benton, Carver, Dakota, Hennepin, Ramsey, Scott, Sherburne, Stearns, Washington, and Wright)
9. $184 Memphis and suburbs (Fayette, Haywood, Lauderdale, Shelby, and Tipton)
10. $189 North of Minneapolis (Chisago and Isanti)

Starting this month, the cheapest silver plan for a 40-year-old in Alaska costs $488 a month. (Not everyone will have to pay that much because the health law subsidizes premiums for low-and moderate-income people.) A 40-year-old Phoenix resident could pay as little as $166 for the same level plan.

That three-fold spread is similar to the gap between last year’s most expensive area — in the Colorado mountain resort region, where 40-year-olds paid $483—and the least expensive, the Minneapolis-St. Paul metro area, where they paid $154.

Minneapolis remained one of the cheapest areas in the region, although the lowest silver premium rose to $181 after the insurer that offered the cheapest plan last year pulled out of the market. Premiums in four Colorado counties around Aspen and Vail plummeted this year after state insurance regulators lumped them in with other counties in order to bring rates down.

Cynthia Cox, a researcher at the Kaiser foundation, said the number of insurers in a region was a notable similarity among both the most and least expensive areas. “In the most expensive areas only one or two are participating,” she said. “In the least expensive areas there tends to be five or more insurers competing.” She said that other factors, such as whether insurers need state approval for their premiums and the underlying health of the population, may play a role as well in premiums.

The national median premium for a 40-year-old is $269, according to the foundation’s analysis.

Alaska’s lowest silver premium rose 28 percent from last year, ratcheting it up from 10th place last year to the nation’s highest. Only two insurers are offering plans in the state, the same number as last year, but the limited competition is just one reason Alaska’s prices are so high, researchers said. The state has a very high cost of living, which drives up rents and salaries of medical professionals, and insurers said patients racked up high costs last year.

Ceci Connolly, director of PwC’s Health Research Institute, noted that the long distances between providers and patients also added to the costs. Restraining costs in rural areas, she said, “continues to be a challenge” around the country. One reason is that there tend to be fewer doctors and hospitals, so those that are there have more power to dictate higher prices, since insurers have nowhere else to turn.

By contrast, in Maricopa County, Phoenix’s home, the lowest silver premium price dropped 15 percent from last year, when Phoenix did not rank among the lowest areas. A dozen insurers are offering silver plans. “Phoenix, during the boom, attracted a lot of providers so it’s a very robust, competitive market,” said Allen Gjersvig, an executive at the Arizona Alliance for Community Health Centers, which is helping people enroll in the marketplaces.

The cheapest silver plan in Phoenix comes from Meritus, a nonprofit insurance cooperative. The plan is an HMO that provides care through Maricopa Integrated Health System, a safety net system that is experienced in managing care for Medicaid patients. Meritus’ chief executive, Tom Zumtobel, said they brought that plan’s premium down from 2014. The insurer and the health system meet regularly to figure out how to treat complicated cases in the most efficient manner. “We’re working together to get the best outcome,” Zumtobel said.

Katherine Hempstead, who oversees the Robert Wood Johnson Foundation’s research on health insurance prices, found no significant differences in the designs of the plans that would explain their premiums. “In most of the plans – cheap or expensive – there seemed to be a high deductible and fairly similar cost-sharing,” she said.

jrau@kff.org | @JordanRau