Is your boss watching your cholesterol?

If you're an employee who's looking to save money or make more of it, here's a little advice: Step away from the cigarettes and chocolate éclairs. They might cost you - and not just in your lungs or on your hips.

That's because more companies than ever are attaching financial rewards and penalties to their employees' health. Do a wellness screening, get $50. Stop smoking, enjoy lower insurance premiums. Hit a weight or cholesterol target, get a contribution to your health savings account.

If you don't do any of those things, you get bubkes - or you might even be penalized. Workers at Wal-Mart Stores Inc pay a surcharge of $10 per pay period if they smoke, for example.

"Companies are struggling to get people more engaged in their health, and financial incentives are an increasingly important piece of that puzzle," says Tom Billet, senior consultant for human resource consulting firm Towers Watson.

Indeed, some 61 percent of employers offered wellness-related financial rewards in 2012, up from 54 percent in 2011, according to Towers Watson. And 20 percent are now assessing penalties, up from 19 percent in 2011.

These wellness incentives have been expanding in scope rapidly. Consulting firm Aon Hewitt found that among employers offering health-based rewards, a full quarter are now attaching them to biometric outcomes like healthy blood pressure or lower body mass index. Last year, just 4 percent did so.

"I never would have expected that number to go to 25 percent so quickly," says Dr. Michael Cryer, Aon Hewitt's medical director. "But companies have been working on this for years already, getting people to know their numbers like blood pressure and weight and cholesterol. Now we're at the stage where they're encouraging employees to actively manage those numbers."

That raises troubling questions about such a nanny-like approach to employee health. Is it really your boss' business if you're gorging at buffets or running marathons? And doesn't it invoke shades of Big Brother, to be constantly monitored for things like blood pressure or glucose levels?

"It's a laudable goal to encourage employees to improve their health, but it's not clear this is the best way to go about it," says JoAnn Volk, a research professor at Georgetown University's Health Policy Institute, who co-authored a recent white paper on wellness incentives.

There are also serious legal questions, too, about health-related rewards and penalties. While they're allowed under health laws like HIPAA (the Health Insurance Portability and Accountability Act of 1996), that doesn't mean companies couldn't face potential action in the courts.

"You can't penalize workers if they have a family history of a certain condition, or a particular genetic makeup," says Volk. "There are also privacy issues, depending on who's running the program and whether the information is being kept confidential. So there are a number of different legal hurdles that companies need to clear."