Smokers may pay more for insurance

6/14/2010

BY SUZANNE PEREZ TOBIAS

The Wichita Eagle

(MCT) — Already faced with smoking bans and rising cigarette prices, many Kansas smokers are learning that lighting up will cost them more for health insurance.

And lying about smoking could cost them their job.

A growing number of employers are requiring workers who use tobacco to pay higher premiums in an effort to lower health care costs.

Newton Medical Center recently informed employees that beginning July 1, it will impose a "tobacco-user surcharge" — $35 per two-week pay period — to employees who smoke or have a spouse or dependents who smoke.

"Studies show that folks who use tobacco typically have higher health care costs than those who don't," said Todd Tangeman, the center's human resources director.

"For those who make that choice, it seems reasonable that they would contribute toward their share of the costs."

Smokers who falsely state on a benefits enrollment form that they don't use tobacco "will face disciplinary action up to and including termination," according to a memo issued to Newton Medical Center employees.

Such measures are becoming more common as employers look for ways to battle rising health care costs. Companies that once opted for carrots over sticks — free gym memberships, for instance, or gift cards for attending a health fair — are moving toward surcharges and other punitive measures.

But how far can employers go in dictating workers' health habits?

Pretty far, say some opponents.

Smoker surcharges "could be the first step down a very dangerous road," said Lewis Maltby, president of the National Workrights Institute.

"If you're going to charge employees for unhealthy behavior, what about the people who go to McDonald's for lunch every day? Everybody does something in their private life that their doctor doesn't like."

"The question is, where does it end? And the answer is, there is no end."

Healthier choices

Newton Medical Center planned to implement its tobacco-use surcharge in January but delayed the move for six months to give workers time to quit, Tangeman said.

"The intent is to help people make a healthier choice," he said. "It isn't to be punitive.

"But this kind of puts a catalyst out there.... We believe it will help bring greater awareness about the real costs of tobacco use."

The California-based Safeway grocery store chain made national news last summer for its Healthy Measures program, which rewards employees for healthy behavior.

Advocates of the so-called "Safeway model" compare it to auto insurance, which for years has tied accident risk to premiums. An 18-year-old man with a sports car and two speeding tickets, for example, pays more than a 45-year-old woman with a sedan and a spotless driving record.

Safeway employees who choose to participate in the voluntary program are tested annually in four areas — weight, tobacco use, blood pressure and cholesterol — and receive discounts for each test they pass.

Those who don't smoke and who maintain healthy weight, blood pressure and cholesterol levels save nearly $800 a year on individual health insurance and more than $1,500 for families.

The Wichita school district is exploring similar measures as part of its overall wellness program, said Shannon Krysl, the district's director of employee benefits and risk management.

"We have people that are fearful of a 'fat tax,' that kind of thing," Krysl said. "But really the whole purpose of this wellness strategy is to raise people's awareness that they have to start taking responsibility for their health status."

Wichita school employees who use tobacco regularly — more than 10 times a year — pay $600 a year more for health coverage. Workers pay another $600 a year if their spouse smokes.

Tobacco-related surcharges or discounts are "becoming fairly common" in Kansas, said Steve O'Neil, life and health manager in the Kansas Insurance Department's consumer assistance division.

Most operate on the honor system: Employees sign a form stating whether or not they smoke. Few companies pay for costly medical tests that measure nicotine levels in a person's body, O'Neil said.

The measures "have been around for so long, most smokers have just kind of accepted this is how things are done," he said. His office rarely fields questions or complaints.

Premiums, charges

The higher premiums for smokers range from $20 to $70 a month.

"We just had to find a number that we thought would get people's attention, but wouldn't be so much that people would blatantly lie about it," said Krysl, the Wichita school district benefits director.

Some, such as the state of Kansas, waive charges for smokers who participate in smoking cessation programs, whether or not they quit.

"Over the long haul, healthier employees cost less and generate fewer claims against the insurance program," said Peter Hancock, spokesman for the Kansas Health Policy Authority, which administers the state health care plan.

What happens if people lie on the forms — if they say they don't smoke but then sneak cigarettes or the occasional cigar?

"I don't think a whole lot happens right now," Hancock said. "That's kind of a personnel issue between the employee and his supervisor. At some point, there are consequences to it."

Krysl said employees caught smoking on district property who haven't paid the tobacco-user surcharge "have the choice of paying that premium retroactively, or being referred to HR for further disciplinary action."

"In our case, there's that added interest in being good role models for students," Krysl said. "We are people they look up to, and we shouldn't be smoking."

Maltby, the workers' rights advocate, said "there's nothing inherently wrong" with making smokers pay more. But he worries about the precedent tobacco surcharges may set.

"Everybody's got something — if it's not tobacco, it's alcohol or junk food," he said. "Maybe you love skiing or scuba diving or riding a motorcycle. All of those carry significant risks. Even your sex life can have medical risks. What if you have a different partner every Saturday night?

"If employers really want to do this effectively, there's no reason to stop at smoking."

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