Thepurpose of this study was to investigate the association between health risksand workers’ compensation (WC) costs. The 4-year study used Health RiskAppraisal data and focused on 1996-to-1999 WC costs among XeroxCorporation’s long-term employees. High WC costs were related toindividual health risks, especially Health Age Index (a measure ofcontrollable risks), smoking, poor physical health, physical inactivity, andlife dissatisfaction. WC costs increased with increasing health risk status(low-risk to medium-risk to high-risk). Low-risk employees had the lowestcosts. In this population, 85% of WC costs could be attributed to excess risks(medium- or high-risk) or non-participation. Among those with claims, asavings of $1238 per person per year was associated with Health Risk Appraisalparticipation. Addressing WC costs by focusing on employee health statusprovides an important additional strategy for health promotionprograms.