More Companies Raising Rates for Employees Who Smoke

More companies are raising health insurance rates for smokers, according to Reuters. Companies are taking a more punitive approach after finding not enough employees signed up for classes to quit smoking, and those who did weren’t showing enough improvement.

One company, Veridian Credit Union in Waterloo, Iowa, told employees if they don’t quit smoking or curb obesity, they will pay higher healthcare costs in 2013.

Earlier this month, Wal-Mart announced it is significantly raising health insurance premiums for many employees who smoke. They will have to pay an extra $260 to $2,340 a year if they want health insurance.

Almost 40 percent of large and mid-sized companies are expected to use penalties to try to discourage employees’ risky health behaviors, up from 19 percent this year, according to the article.

“Nothing else has worked to control health trends,” LuAnn Heinen of the National Business Group on Health, which represents large employers on health and benefits issues, told Reuters. “A financial incentive reduces that procrastination.”

A growing number of companies are linking employees’ eligibility for lower-cost health plans to tobacco screening test results. Hospitals are at the forefront of the trend.

The Cleveland Clinic was one of the first hospitals to institute a tobacco screening policy for employees. Applicants who test positive for tobacco use are not considered for employment. They are referred to tobacco cessation resources, which the clinic pays for. This summer, hospitals in Michigan, Missouri and Iowa have adopted similar hiring policies. Approximately 30 states cannot institute such policies because they have “smoker protection” laws.