Employers are offering cash, gift cards, even cruises to employees who take steps to get in shape (and cut their health-care costs by millions).

In an attempt to hold down spiraling health-care costs, many companies are paying employees to lose weight or get in better shape. Employers are doling out bonuses, insurance discounts, vacation days and even gift cards.

Highmark, a Pennsylvania Blue Cross/Blue Shield licensee, offers a health and fitness program called Lifestyle Returns that pays $225 each year to employees agreeing to medical assessments and free health and nutrition coaching. The program is open to all employees, whether they are fit or fat. Because, as Highmark Vice President Anna Silberman puts it, not only do they want to move people from high to low risk, they also want to "keep low-risk people at low risk."

"We know that 70% of chronic conditions are preventable," Silberman says. "If we can prevent adverse health effects, this is a win for the insurance company and a win for the employee."

Freedom One Financial Group, a Michigan provider of 401(k) plans, jump-started its fitness program in 2005 by offering a free four-day cruise to Jamaica for employees who met certain weight loss or body fat reduction goals. At the end of the three-month challenge, 36 of its 70 employees had together lost 310 pounds, and 21 employees were given the free cruise. Now that so many of its employees are participating in its wellness challenges, it has begun offering trips, gift certificates and other prizes to the winners of certain in-house fitness contests.

"The employees are really keen to stay on the program and stay focused," says John Young, Freedom One executive vice president of marketing, who helped launch the program and lost 64 pounds in the process.

The size of the problem

An estimated 65% of adults are overweight or obese, according to the Centers for Disease Control and Prevention, putting them at greater risk for serious ailments including cardiovascular disease, diabetes, depression and certain forms of cancer. The tab associated with obesity cost American companies $56 billion in 2000 alone, the CDC estimates, and that burden is continuing to rise, experts say, as a larger chunk of Generations X and Y is weighing in heavy.

"One of the greatest concerns now for employers is the problem of obesity" and the toll it is taking on productivity and health-care costs, says Bill Whitmer, president of the nonprofit, employer-sponsored Health Enhancement Research Organization.

Benefits of NOT Smoking

Employers are also offering motivational incentives for employees to stop smoking.