Employers help snuff bad habit

Smokers cost money, so some companies offer incentives while charging higher premiums to those who still light up.

By Christina Rexrode, Times Staff Writer
Published December 16, 2007

Terri Rozell, 48, traffic coordinator at Transitions Optical in Pinellas Park, gets help from her company to quit the habit.
	[Lara Cerri | Times]

Debbie Borr quit smoking two years ago, impressed by her husband's example. Kamala Kishore quit on Jan. 1, earning praise from her daughters. And Monica Luff quit just last month, kicking a habit that had plagued her since she was a teenager.

Borr, 50, is a training developer at Transitions Optical in Pinellas Park. Kishore, 46, is a registered nurse at the H. Lee Moffitt Cancer Center in Tampa. And Luff, 42, is an office manager at the Manatee County Convention and Visitors Bureau.

Their common thread? When they decided to quit smoking, their employers offered a hand. Borr and Kishore attended classes at work on how to stop smoking; Luff opted for laser therapy, which Manatee County's insurance plan started covering this year.

As companies watch their health care expenses rise without ceasing, they're homing in on one of the parties they blame: the smokers. Across a diverse range of industries, employers are realizing the cost benefits of getting workers to kick a bad habit.

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Employers' first line of action is supportive, urging employees to quit smoking by giving them resources to help. They're offering free how-to classes on company time, and expanding their coverage of nicotine replacements, prescription drugs, laser therapy and other smoking cessation treatments.

But at some companies, employees who don't quit - or don't at least try - can be slapped with higher premiums.

Most employers don't couch that second line of action in such punitive terms. Instead, they say they're rewarding their nonsmoking employees with cheaper rates.

However it's phrased, it's a trend that could explode, now that the federal government has given its implicit approval of the practice. Federal guidelines that took effect July 1 clarified that employers can charge different premiums to smokers and nonsmokers in the same group health plan.

The semantics make it hard to gauge how many employers are asking their smokers to pay more for health care. In a survey published last month by the St. Petersburg Times, 3 percent of local companies said they're charging higher premiums to "employees with poor health habits."

But a survey released last month by Watson Wyatt and the National Business Group on Health, posed a similar question in positive terms: Were employers offering "financial incentives to encourage workers to monitor or improve their health"?

Forty-six percent said yes.

Of course, a higher premium isn't the only "financial incentives" weapon a company can use when it's trying to get employees to stop smoking.

Walgreens uses aversion therapy: It recently started levying a small fine on smokers' paychecks.

FPL Group Inc., the Juno Beach parent for Florida Power and Light, uses rewards: It gives $75 to each smoker who goes through a smoking cessation program. FPL's insurer, Cigna, kicks in $100 for the employee's health spending account. The Pinellas County Sheriff's Office has simplified the matter: In 2004, it stopped hiring smokers.

"It contributes to the wellness of the organization as a whole," said spokeswoman Cecilia Barreda.

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FPL has deemed its program a success: It says its health costs are rising at a rate lower than the national average, which is about 7 percent this year. Also, FPL points out, nonsmoking employers generally take fewer sick days.

Whether they're doling out bonuses, like FPL, or discounted premiums, like Moffitt or Manatee County, most companies rely on the honor system to determine who is a nonsmoker.

"We get calls all the time, 'Well, so-and-so says he's not smoking, but I've seen him,'" said Bob Goodman, Manatee's health benefits manager. "Our employees are insisting on accountability, and that has been very, very interesting."

Starting next month, the county is implementing nicotine testing for its employees.

Christina Rexrode can be reached at crexrode@sptimes.com or 727 893-8318.

$5.82-billion: Health care costs directly caused by smokingeach year in Florida.

$5.86-billion: Lost productivity caused by smoking each year in Florida.

$3,856: How much a smoker costs his or her company, in direct medical costs and lost productivity, each year.

46 percent: Employers who offer workers financial incentives for healthy choices.

26 percent: Employers who plan to start doing so by 2009.

Sources: Campaign for Tobacco-Free Kids, Centers for Disease Control, PricewaterhouseCoopers, Watson Wyatt and the National Business Group on Health

Why does my boss care if I smoke?

Female smokers incur $17,500 more in lifetime medical expenses and miss an average of two more days of work than nonsmoking women.

Male smokers incur $15,800 more in lifetime medical expenses and miss an average of four more days of work than nonsmoking men.

Source: National Business Group on Health

Questions & Answers

Is it legal for a company to charge higher premiums to workers in the same health plan?

Usually, no. A federal law called HIPAA, or the Health Insurance Portability and Accountability Act, generally bans group health plans from excluding workers or charging them higher premiums on the basis of their health - medical history, genetic information, disabilities, and other "health factors."

If someone smokes, is that a "health factor"?

The federal government leans toward "yes." It points out that nicotine addiction is a medical addiction according to the benchmark Diagnostic and Statistical Manual of Mental Disorders.

So why are companies allowed to charge higher premiums to smokers? Doesn't that violate HIPAA?

Not if it meets certain guidelines, which took effect July 1: The difference between premiums paid by a smoker and a nonsmoker can't be more than 20 percent. Smokers must be given the opportunity to qualify for the lower premium every year. And companies should reward effort, not success. For example, a smoker should qualify for lower premiums if he completes a smoking-cessation class, even if he doesn't quit smoking because of it. Otherwise, he could allege he was being discriminated against for a medical condition - for example, that his nicotine addiction made it unreasonably difficult for him to quit smoking.

Okay, so this practice can be legal. But is it right?

It has its critics, who say companies are becoming lifestyle police. Companies shouldn't tell employees that they can't engage in legal activities on their own time, they say.

"When corporations start controlling private behavior, they fundamentally disrupt a free society," said Jeremy Gruber, legal director of the National Workrights Institute in New Jersey. "Any time an employee wants to engage in any type of activity or use any type of product, they have to ask themselves, 'What will my employer think?'"

Is my employer going to start regulating other parts of my life, just so it can cut its health care costs?

Some industry followers predict that obesity is the next target. In a recent survey by the National Business Group on Health, employers said obesity is the biggest health issue their companies are facing. (Second place? Smoking.)

Will Fike, owner of a corporate wellness firm in Clearwater called WillPower USA, envisions a day when employers will fine workers who don't meet certain weight or cholesterol guidelines.

Like smoking, obesity can be viewed as a drain on company resources. A 2005 study cosponsored by the Centers for Disease Control found that an obese employee costs a company anywhere from $460 to $2,485 in medical costs and absenteeism.

And like smoking, obesity is not a very sympathy-inducing medical problem, said John Robinson, an employment lawyer at Fowler White Boggs Banker in Tampa. Right or wrong, he said, people tend to believe that smoking and obesity are just a matter of willpower.

Said Robinson: "It's sort of open season on smokers."

[Last modified December 14, 2007, 20:25:52]