Monday, February 20, 2006

Employers hit smokers in the wallet

This article was taken from CNN.com. The URL for this article is www.cnn.com/2006/HEALTH/02/16/smokers.insurance.ap/index.html?sec

A growing number of private and public employers are requiring employees who use tobacco to pay higher premiums, hoping that will motivate more of them to stop smoking and lower health care costs for the companies and their workers.
Meijer Inc., Gannett Co., American Financial Group Inc., PepsiCo Inc. and Northwest Airlines are among the companies already charging or planning to charge smokers higher premiums. The amounts range from about $20 to $50 a month.
"With health care costs increasing by double digits in the last few years, employers are desperate to rein in costs to themselves and their employees," said Linda Cushman, senior health care strategist with Hewitt Associates, a human resources consulting and services firm.
She said the practice of smoker surcharges is becoming such a significant trend that this year, it will be part of Hewitt's annual survey of companies' current and future health care plans.
Cushman said a general benefits survey of 950 U.S.-based employers last year showed that at least 41 percent used some form of financial incentives or penalties in their health care plans.
She estimates that at least 8 percent to 10 percent of the businesses probably aimed some of the incentives or penalties at smokers and says that percentage is growing.
"With smokers costing companies about 25 percent more than nonsmokers in the area of health care, it just makes good business sense," she said.
The companies imposing the surcharges are mostly self-insured, with employers and employees sharing the insurance premium costs.
Other companies or insurance plans have offered workers financial rewards for exercising, dieting or other healthy behaviors. Some have started onsite fitness programs and are paying for gym memberships.
Jim Wendling, a 45-year-old employee for Cincinnati-based Kroger Co., recently acknowledged on Kroger's health survey that he is a smoker. Even though Kroger doesn't charge smokers more for insurance, he fears the survey may be the first step in that direction.
"I personally don't think a company should tell employees what to do when they are not at work," Wendling said.
Do you agree with Wendling?

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