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Finding insurance savings in weight loss plans

After years of targeting individuals, diet companies are

After years of targeting individuals, diet companies are focusing on employers looking to cut health care costs by slimming down workers. Photo Credit: Getty Images

Barbara Buckingham joined Weight Watchers only because her employer offered it free. The reimbursement analyst at Cleveland Clinic has since shed 30 pounds and is halfway to her 168-pound goal.

"If my employer is going to go these lengths, I'm committed," said Buckingham, 61.

After years of targeting individuals, diet companies are focusing on employers looking to cut health care costs by slimming down workers.

Weight Watchers International persuaded American Express and NYSE Euronext to offer subsidized weight-loss programs for employees. Nestle's Jenny Craig and Nutrisystem have programs that lured companies such as AT&T and Wells Fargo.

"CEOs get it," Weight Watchers chief executive David Kirchhoff said during a January investor conference. "They are tired of watching their health care premiums go up 8 percent a year."

While corporate clients present potential sales in the long term, any increase in revenue will be small until more businesses get on board, said Kurt Frederick, a San Francisco-based analyst at Wedbush Securities.

The U.S. weight-loss industry may increase 4.5 percent to $65 billion this year, and nearly half of the nation's adult population is on some sort of diet, according to Tampa, Fla.-based researcher Marketdata Enterprises. Weight Watchers struggled through the recession, with revenue declining 8.9 percent in 2009. In 2011, the New York-based company boosted sales and profit -- revenue was up 25 percent to $1.82 billion -- using celebrities such as Jennifer Hudson to tout its programs.

While Weight Watchers first began holding meetings at worksites in the 1980s, last year it began "in earnest" to sell corporate programs. Jenny Craig, which started its corporate wellness program in 2004, said it gives discounts to employees of some of these clients, which include AT&T, Wells Fargo, CVS Caremark and Verizon Communications. About 8 percent to 10 percent of its client base are corporate accounts.

American Express began paying for its employees to join Weight Watchers for one year and more than 5,200 workers have signed up in 2012, compared with fewer than 2,000 last year, said David Kasiarz, senior vice president of global compensation and benefits. Before this year it offered only a discounted program.

"We wanted to have something with broad appeal," Kasiarz said.

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