W2 Issues/Concerns


Check out our weekly blog posts and see the latest news and discussions happening in the HR world of business.

In the News: The pros and cons of refusing to hire smokers

In recent years, a number of companies – particularly those within the healthcare industry – have enacted policies under which they refuse to hire tobacco smokers. HR Morning News recently profiles an article by Kytle Frye for the Becker’s Hospital Review website that examined whether such policies – which are designed to reduce healthcare costs – are actually detrimental to companies.

The Pros:
Citing various studies conducted over the past few years, Frye notes that:
•smokers miss an average of 6.16 days of work per year, as opposed to 3.86 days missed by non-smokers
•a smoker taking four 10-minute smoke breaks per day works one month less per year than non-smokers
•for each smoking employee, an employer takes on an additional $3,391 per year in costs, which includes $1,760 in lost productivity and $1,623 in excess medical expenses
•Smokers make more hospital visits per 1,000 employees at 124 per year vs. 76 per year for non-smokers, and stay an average of 6.5 days versus 5 days for non-smokers. In addition, smokers make six more visits to healthcare facilities than non-smokers each year.

However, it should be noted that the Equal Employment Opportunity Commission doesn’t recognize smokers as a protected class. However, 29 states and the District of Columbia have laws in effect elevating smokers to a protected class. To see the full list, please visit the American Lung Association.

Now the cons – largely in the form of legal issues – come in, in part, when you factor in Obamacare, which recognizes the increased healthcare costs associated with smoking employees by allowing insurers to raise smokers’ insurance premiums up to 50 percent over those paid by non-smokers. However, implementing premium differentials for smokers can involve some risk:
•The Health Insurance Portability and Accountability Act (HIPPA) law prohibits employees enrolled in a group health insurance plan from being charged more for coverage because of a “health factor,” which includes health status, medical condition and claims experience, among other things. Although smoking isn’t named as a health factor, Frye notes that “medical opinion exists identifying nicotine addiction as a medical condition.” However, HIPAA does allow employers to maintain a premium differential as long as they establish a non-smoking program as part of a wellness initiative that provides a “reward” for participation in the form of a reduced premium for not smoking.
•A second legal problem that can arise stems from the Americans with Disabilities Act’s prohibition against discriminating in benefits with respect to qualified individuals with disabilities. Although smoking has yet to be identified as a disability, it often does involve attendant health issues that are disabilities, and there is always a possibility that a court would accept a claim on the theory that a smoker was “regarded as” being disabled. Again, Frye notes that again, having an acceptable wellness program would likely provide some insulation from such outcomes.
•Frye further notes that imposing a premium cost for smokers – who are said to be less affluent, less educated and more likely to be minorities or certain ethnicities – has a disproportionate adverse impact on such people, which may amount to racial or national origin discrimination.
•In addition, the anti-smoking journal Tobacco Control questions whether you really want to lose that top salesperson or IT manager to a competitor because of smoking? Especially when smoking is “an addiction that could be licked with some help.”

Further, if the decision was based on healthcare costs alone, couldn’t you then make a case for declining to hire people with weight-related problems, chronic disease or other expensive medical conditions? It then becomes a very slippery slope and could open even the most well-meaning company up to expensive litigation.

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