JASPER, IN - MasterBrand Cabinets has adopted an employee health care strategy that incorporates incentives encouraging healthier lifestyles - quitting smoking, losing weight, etc. - by offering lower premiums health insurance premium to workers who comply.

MasterBrand Cabinets human resources manager Robert Jacobs told the Wall St. Journal that double-digit health coverage led the cabinetry manufacturer to establish health insurance premium schedules for its 7,000 employees based on cholesterol, blood pressure, weight factors and smoking.

Health insurance is the cabinet manufacturer's third largest expense, after lumber and panel products, and salaries. ""I can't pass that along to my customers in prices on kitchen cabinets," Jacobs told the WSJ.

At the Pallet Company, owner Michael Doyle says rising coverage costs have lead to policies with higher deductibles, shifting the burden to employees.“If I have to pay for all the employees, it puts a tremendous strain on us,” Doyle told Pallet Enterprise magazine.

As premiums and deductibles rise, some line workers in the wood pallet plant decline health coverage, opting for higher paychecks with no insurance premiums deducted. This reduces The Pallet Factory's financial burden for health insurance, but puts employees at risk.

Components of the national health care program, formally known as the Patient Protection and Affordable Care Act, are activating in stages. In 2014, states will be required to open insurances exchanges for those who can't obtain insurance in other programs. Also in 2014, baseline standards for health care coverage programs will be set, requiring items such as maternity care, prescription drugs, and hospitalization.

On Friday the Health & Human Services Secretary Kathleen Sebelius announced that individual states would be allowed to establish these baseline coverage elements, rather than having them established centally by the Federal government.

Most businesses with 50 or more employees offer health insurance says a Kaiser Family Foundation study; 95% of firms with 50-199 employees and 99% of those with 200 employees or more.

In 2011, total health care costs per active employee are set to reach on average $11,176, up from $10,387 in 2010, according to a survey by consulting firm Towers Watson and the National Business Group on Health. Employers pay 36% more for health care, and employees contribute over 45% more than they did five years ago.

The study found 10 percent of U.S. employers added financial incentives to health outcomes like cholesterol-test results this year.

MasterBrand workers pay up to $10.50 a week extra based on health test results; the healthiest employees get $2 a week off on their insurance premiums. The program is administered by Bravo Wellness. Non-participants in the wellness program at MasterBrand pay an extra $37.50 a week in premiums.