Wednesday, December 18, 2013

Non-smoker Discount Laws and regulations For Medical Health Insurance

Non-smoker discounts on health insurance aim to create incentives for smokers to quit.

Employers that offer discounts on health insurance to non-smoking employees must offer health plans that comply with the Health Insurance Portability and Accountability Act (HIPAA) guidelines for wellness plans, rather than simply charging smokers more.


The Centers of Disease Control and Prevention estimate that extra costs for insuring smokers combined with amounts lost to lower productivity average $3,390 per year, per smoker.


Employers offering health plans with discounted premiums for non-smoking employees need be careful to comply with HIPAA guidelines and any state laws such as those in Minnesota and Wisconsin that prohibit discrimination against employees for drinking and smoking away from work.

Discount Amounts

Allowable discounts cannot equal more than 10 percent to 20 percent of the total individual coverage premium amount, including both employer and employee contributions.


The discount must not conflict with the Summary Plan Description (SPD), although it need not be written into the SPD. A one-page written policy statement suffices if distributed annually, usually at open enrollment, accompanied by an employee-signed affidavit.


Employers must offer reasonable programs to help smokers quit, although HIPAA does not require employers to pay for the program. Employees cannot be forced to quit smoking and can receive the non-smoker discount if they provide documentation of attendance at a smoking-cessation program.

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