It’s that time again – many of our clients are in the planning phases for next year’s benefits strategy. This typically sparks discussions about cost savings and restructuring wellness and benefit designs. And tobacco programming has been on many of our clients’ list.
Studies have shown that tobacco users cost a health plan $6,000+ more annually than non-tobacco users. Multiply that by the number of tobacco users in your employee population – cost savings found! Employers have taken note, and we’ve been fielding more questions about tobacco differentials, (a.k.a. tobacco surcharges or non-tobacco user discounts).
Viewpoints from Erin Milliken and Claire Letourneau
Generally, clients can use this carrot-or-stick approach to encourage tobacco users to quit, or at least try.
Employers need to take several compliance considerations into account (think HIPAA and Affordable Care Act wellness program rules). The EPIC Wellness & Health Management team is always happy to offer guidance on compliance before you dive in with your internal legal team.
One of the most consistent questions we get, however, is, “how much do companies usually charge tobacco users?”
So, we asked our clients! Our recent EPIC Tobacco Cessation Pulse Survey focuses on overall tobacco differential and cessation program designs. The responses we’ve received in just over a week provide benchmarking as we look to help clients work through their benefits and tobacco differential planning for 2021. Ask your account manager for a full report of the 2020 survey results or request them below.
Our wellness team members are the go-to folks in our offices for all things tobacco (a couple of us having tobacco cessation programming in prior work experience), and the first piece of data we found surprising was that 55% of respondents do not have a tobacco cessation program in place. Given how costly tobacco users are to employers, we expected program inclusion to be higher. According to the Centers for Disease Control and Prevention (CDC), “smoking-related illness in the United States costs more than $300 billion each year,” including direct and indirect costs.
As that 55% of respondents consider what to do for 2021, let us provide a bit of insight from our other respondents who do have a program in place:
- 24% have a prescription medication component to their program (through the medical and/or pharmacy plan)
- 18% offer tobacco cessation coaching for users who want to quit
- 17% offer a non-tobacco user premium rate
- Most companies with a tobacco differential reported the value of the tobacco differential is between $26-$50 per month
30% of all respondents reported that no more than 20% of their population is a current tobacco user, which is in line with current data from the CDC (they report around 14% of U.S. adults are tobacco users). Though tobacco use is on the decline in the U.S., it’s still the number one cause of mortality and morbidity globally. Plus, tobacco use and second-hand smoke exposure is the primary risk factor for costly chronic conditions. Employers take note.
There are several tobacco cessation programming options and ways to support tobacco users in your employee population.
We’re always ready to collaborate with you and provide creative methods to combat tobacco use in your employee population.
Finally, a big “Thank You!” to the companies that participated in our survey. We found this information interesting and hope you do too. We love hearing from our clients and adjusting to your needs – and you get a full report of the results! EPIC plans to offer the tobacco pulse survey again in future years, so be sure to participate. And stay tuned for future EPIC Pulse Surveys that will focus on a variety of Wellness & Health Management topics.
Check out COVID-19 resources for employee benefits and risk management at the EPIC coronavirus update center
See results from our In It Together COVID-19 pulse surveys by visiting epicbrokers.com/insights/preparing-for-the-new-normal
EPIC offers these opinions for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this article and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.
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Wellness Consultant – Houston, TX
Senior Account Executive, Wellness – New York, NY