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Smokers choke on new surcharge

By Jay MacDonald · Bankrate.com
Tuesday, June 14, 2011
Posted: 9 am ET

If you smoke, you may soon choke on the cost of your health insurance. Why? Because those of us who don't smoke are sick and tired of paying for your habit -- and thanks to health care reform, soon we may no longer have to.

It's estimated that each employee who smokes may cost their employer more than $11,000 per year in additional health care costs, disability payments and time lost from work. That's money that could be going to the rest of us for things like pay increases and benefits.

A worker who smokes can cost their employer $11,000 annually in health care, disability and lost productivity. A growing number of employers think it's time smokers paid their fair share.

Nationally, the Centers for Disease Control and Prevention estimates that smoking, the leading preventable cause of death with 443,000 smoking-related deaths annually, costs $96 billion in health care costs and $97 billion in lost productivity every year. Second-hand smoke alone costs $10 billion annually. 

Health insurers have long recognized the additional risk to insure smokers and have charged them higher premiums. But the move by employers to do so by imposing a health insurance surcharge on workers who smoke has been a delicate legal dance.

Long story short, when smoking was considered a "health status," employers feared being charged with discrimination under the federal Health Insurance Portability and Accountability Act, or HIPAA, if they imposed a surcharge.

But now that the feds have reclassified smoking (rightly, I believe) as a "behavior," relief may be in sight. The Affordable Care Act opens the door for employers to impose up to a 50-percent surcharge on employees who smoke, beginning in 2014.

Signed, I might add, by the Closet-Smoker-in-Chief.

Not that corporate America is waiting for the starting gun. According to a 2008 study by Hewitt and Associates, nearly half (47 percent) of 600 large U.S. companies surveyed, representing 10 million workers, have raised rates and/or initiated a health insurance surcharge for smokers or plan to do so soon.

The growing ranks of employers who have already adopted a smoker's surcharge include Gannett ($50 per month), PepsiCo ($100 per year), Whirlpool ($500 per year) and the states of Alabama ($20 per month) and Georgia ($40 per month). Recently, Florida's Palm Beach County School District, the county's largest employer with 21,000 employees, announced it will ding smokers $50 a month beginning in 2012.

Some employers, including Michigan-based Weyco Inc., have gone so far as to fire workers who refuse to give up the habit. Legions of public and private enterprises already refuse to hire smokers.

Three words: It's. About. Time.

As John Banzhaf III, the professor of public interest law at George Washington University and executive director of Action on Smoking and Health (ASH) points out, the use of incentives (i.e., cash) to encourage workers to quit smoking has been largely ineffective, while even a small disincentive, such as a surcharge, has convinced smokers to break the habit.

Smokers, please understand: I'm no prohibitionist. I believe that what you choose to put into your body is your business. Like everyone else, I've tolerated your second-hand smoke, your highway trash and the gruesome anti-smoking commercials your habit has inflicted on us over the years.

But when your behavior impacts my wallet, I believe it's perfectly reasonable of me to slide the check your way.

If you don't like it, quit.

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11 Comments
Jay MacDonald
July 01, 2011 at 4:28 pm

Happy to, Biff. Here's some background: http://ash.org/$12000

Biff
July 01, 2011 at 10:02 am

Would you care to publish any citations for these bs cost figures, or are we simply to accept the word of an admittedly-biased quasi-author?

David
June 18, 2011 at 2:20 am

Funny, but where I work, it's the smug, clean air freaks that call in sick every other week...

John Aherne
June 17, 2011 at 7:47 am

"It's estimated that each employee who smokes may cost their employer more than $11,000 per year "

Keep repeating that. At least the unthinking idiots and anti-smoking nazis will believe it

mc
June 16, 2011 at 10:18 am

The tiny federal tax on cigarettes does not "pay for the cost of health care." At the very least, if smoking is a voluntary luxury, why not tax it the way other countries do?

ClareB
June 15, 2011 at 6:25 pm

I think all people overweight should pay an insurance surcharge. Why should insurance companies and employers have to pay for those who can't stay in a healthy weight range. Better yet- let's just cancel the insurance of those don't fit in the normal BMI. Obesity increases your risk of high blood pressure, type 2 diabetes, heart disease, stroke, gallbladder disease, cataracts, age-related macular degeneration (AMD) and cancer of the breast, prostate, and colon. We can just refuse to hire people who are overweight. I'd like to see some figures on how many millions of dollars are spent treating weight related health issues. When this day comes, many will say three words: It's. About. Time. As the post says above: "But when your behavior impacts my wallet, I believe it's perfectly reasonable of me to slide the check your way". I concur.

Paul Puckett
June 14, 2011 at 6:07 pm

Cigar smoker myself. I didn't ask you, or anyone else, to pay any of my health care, but I did predict that gov't's involvement in health care would result in gov't control of peoples' behavior. As this trend moves to donuts, burgers, cheese, candy, books, movies, popcorn, cars, houses, etc., remember your support for discriminating against those with whom you disagree.

If you haven't seen the movie Gattaca, it's a good movie, particularly at a time when so many forget what freedom actually means. The movie has nothing to do with the US, it's a bit more subtle but I'm certain viewers will understand this issue better after watching it.

While we're on the topic, if nobody smoked the costs of health care would not fall. We will all die and most of us will need care in our final years. The same money, or more, will be used to pay for other health issues.

The growth of the health care sector due to government involvement has dramatically increased the size and costs of health care. Ironically, quality of care and lifestyles of those working directly with patients has suffered. Insurance companies, HMO's, lobbyists, and government have benefited at your, and my, expense.

An option you did not consider, and one many are taking, is dropping their health coverage entirely. Until the gov't decides it can order the people to live according to the governments will, the people can still make choices, even bad ones. That is why many are supporting mandated coverage.

Ultimately, we will be unable to financially support the growth of the federal government and it will collapse of it's own weight.

One question, why does the following surprise you?

"Signed, I might add, by the Closet-Smoker-in-Chief."

It doesn't surprise me at all and, like all politicians, the surcharges and other health legislation will not apply to him.

Finally, congratulations on your support for discrimination. It's good to know the honest opinions of those we read.

Live and let live. Leave other people to their own business. Celebrate smokers choking on surcharges, if you wish, but one day it will be one of your behaviors that has a surcharge. Based on the current growth of gov't, I suspect you won't wait long.

JohnL
June 14, 2011 at 1:05 pm

I'm not a smoker, but you noted...."A worker who smokes can cost their employer $11,000 annually in health care, disability and lost productivity. A growing number of employers think it's time smokers paid their fair share."

Smokers already are required pay for the cost of health care by paying an enormous federal tax on each pack of cigarettes.

In addition, there is a premium on life insurance smokers pay too.

You might want to write about the illegals that cost the tax payers more in health care costs than smokers and point out what actions the Closet-Illegal-In-Chief is doing about illegal immigration.