Smoke Out: Gannett Among Companies Docking Employees Who Light Up

By: LISA CORNWELL, Associated Press Writer (AP) Smokers squeezed by soaring cigarette costs and workplace smoking bans are increasingly being hit with another cost increase -- this time for health insurance.

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% used some form of financial incentives or penalties in their health care plans. She estimates that at least 8% to 10% 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% 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.

The Centers for Disease Control and Prevention estimates $92 billion in lost wages annually in the United States from smokers who die prematurely. In addition, the economic cost of smoking includes $75.5 billion per year in direct health care costs.

Gannett Co., the nation's largest newspaper publisher, this year began charging its employees who smoke an extra $50 a month for the company's insurance coverage.

"We have some strong feelings that smoking is really bad for employees, and a healthier employee is better for us," said Tara Connell, a spokeswoman for the McLean, Va.-based company.