2005 January 31 Monday
Many Companies Move To Ban Hiring Of Employees Who Smoke

Employers are banning smoking by employees even off of work sites.

In fall, Union Pacific Corp., an Omaha, Neb.-based transportation company, stopped hiring smokers in seven states. Company officials said the move was made to help quell employee health costs, which have jumped more than 10 percent each of the past three years.

Weyco Inc., an employee benefits company with 200 employees in Okemos, Mich., began random drug tests for nicotine on Jan. 1, saying it would fire workers who failed the test or refused to quit smoking.

Note the parallel with employers who fire workers who fail tests for illicit drugs. The difference here is that smoking nicotine-carcinogen combo sticks is legal. But what if an employee was using Nicorette or other non-smoking form of nicotine? They'd be fired anyway. Though I could imagine the development of blood tests that would detect the toxic chemicals that come in with the nicotine in the cigarette smoke.

The President of Weyco doesn't want to pay for the costs of smoking.

Weyco Inc. administers benefits plans for other companies. Its president, Howard Weyers, wants it to be a role model for them as they aim to keep health costs low. He says, "I don't want to have to pay for the results of smoking."

Hey, I don't either. I also do not want to pay for the illegitimate kids of others, the abandoned kids of others, the kids born messed up by drug addict moms, or alcoholics crippling people for life in car accidents. Some more things I don't want to pay for: poorer health outcomes from others eating lousy food and from others not getting enough exercise. Oh, and this is motivated by someone I know: People who would rather buy themselves a new truck or take vacation trips than buy health insurance for their kid (I picture a tax on parents who do not have health insurance for their kids). I could go on. The list is long. The more society as a whole pays for irresponsible behaviors the more at least some people will behave more irresponsibly.

Plus, the responsible (and more capable) end up getting less as a result of the irresponsibility of others. Imagine everyone took far better care of their health. Then medical costs would be lower and health insurance costs would be lower and more employers would find medical insurance affordable. So more people who are now behaving responsibly but who can not afford medical insurance would have medical insurance.

6% of Weyco's workers quit smoking in response to the ban.

Among the company's 200 workers, about 12 kicked the habit before the ban.

Some workers quit their jobs in response to the ban rather than quit smoking (such is the power of the demon weed). But other workers responded to the greatly increased cost of their habit by breaking the habit. If more of the costs of irresponsible behavior were levied on those who act irresponsibly then there would be a lot less irresponsible and costly behavior.

Weyco uses a large array of carrots and sticks to get their employees to be more responsible about their health.

Clearly, smoking is dangerous to smokers and others. In fall 2003, we decided that, as of Jan. 1, 2005, we would no longer employ smokers. Since then, we've assisted employees through a series of meetings about the program, as well as supportive efforts including smoking-cessation classes, medication, and acupuncture. We've implemented the change gradually, encouraging smokers to become healthier and remain WEYCO employees.

We also provide employees with a $35 monthly incentive to use a fitness facility, another $65 for meeting modest fitness goals. We created and use walking trails on our campus.

While trying to be sensitive to smokers' personal predicament, we're also saying, "You can choose to smoke after Jan. 1, but if so, you'll need to find other employment."

Some call this a violation of privacy, pointing to the principle that "what you do in your own home is your own business." But they forget the part about "so long as it doesn't harm anyone else."

Michigan businesses have the right to protect themselves from the enormous financial harm that smokers inflict upon society. So do individual employees and taxpayers.

As another way to cut costs one can easily imagine employers making rules about being overweight with too much body fat. Ditto for the use of blood tests for nutrient levels to detect whether someone is pigging out on junk food.

Less than half the states allow total smoker bans by employers but some big population states including California are in the list of states that allow such bans.

Moreover, they argue, it monitors what people do outside the workplace and discriminates against their lifestyles, a practice that is banned in 29 states that have smokers' rights statutes, also known as "lifestyle rights laws," which prohibit employers from discriminating against smokers.

Michigan is one of 21 states that do not have such laws. Others include California, Florida, Ohio and Texas.

About 1% of employers in one poll were found to ban smokers from their work forces.

A study conducted this month by the Society for Human Resource Management found that about 32 percent of the employers polled offer stop-smoking programs, 12 percent prefer not to hire smokers, nearly 5 percent charge higher health care premiums for smokers and 1 percent have a formal policy against hiring smokers.

Note that the current tax laws regarding medical insurance and medical costs makes the cost of medical premiums less for employers who pay in pre-tax dollars than for employees and the self-employed who pay in post-tax dollars. Whether a person smoked or not would matter far less to employers if medical insurance was just as easily purchaseable by individuals. However, if insurers are allowed to charge higher prices to smokers then the smokers are still going to pay financially for their habit.

The move of employers to get tough with employees who smoke comes in the face of medical insurance premiums that are becoming incredibly expensive.

Washington, DC – Employer-sponsored health insurance premiums increased an average of 11.2% in 2004 -- less than last year’s 13.9% increase, but still the fourth consecutive year of double-digit growth, according to the 2004 Annual Employer Health Benefits Survey released by the Kaiser Family Foundation and Health Research and Educational Trust (HRET). Premiums for employer-sponsored health insurance rose at about five times the rate of inflation (2.3%) and workers’ earnings (2.2%).

In 2004, premiums reached an average of $9,950 annually for family coverage ($829 per month) and $3,695 ($308 per month) for single coverage, according to the new survey. Family premiums for PPOs, which cover most workers, rose to $10,217 annually ($851 per month) in 2004, up significantly from $9,317 annually ($776 per month) in 2003. Since 2000, premiums for family coverage have risen 59%.

The survey also found that the percentage of all workers receiving health coverage from their employer in 2004 is 61%, about the same as in 2003 (62%) but down significantly from the recent peak of 65% in 2001. As a consequence, there are at least 5 million fewer jobs providing health insurance in 2004 than 2001. A likely contributing factor is a decline in the percentage of small employers (three to 199 workers) offering health insurance over this period. In 2004, 63% of all small firms offer health benefits to their workers, down from 68% in 2001.

As health becomes an increasing portion of total costs employers are increasingly incentivized to lean on employees in an increasing number of ways to get employees to eat and behave in more healthy fashions. In some cases we may also see changes to internal and external work site layouts to increase the amount of exercise employees get in the course of workdays.

Share |      By Randall Parker at 2005 January 31 11:15 PM  Economics Health

Invisible Scientist said at February 1, 2005 5:51 AM:

This is just the beginning. In the future, ultimately, there will be a situation similar to the
movie "Gattaca", where your genetic profile will be part of your record, and you will be hired and
fired on that basis, not the mention the marriage rules which will be based on the genetic record.

So Very Bitter said at February 1, 2005 7:53 AM:

"Some more things I don't want to pay for: poorer health outcomes from others eating lousy food and from others not getting enough exercise."

Conversely, what about "fit" people who are still dumbasses and do "extreme" "sports" that get them constantly in the hospital? Skiers with broken legs? MXers breaking their vertebrae? Sometimes "fit" people run up bigger hospital bills: I limit my exercise almost exclusively to walking, swimming, and biking, and I have not had a broken bone in my life.

Randall Parker said at February 1, 2005 9:36 AM:

So Very Bitter,

Yes, that happens. But extreme sports types cause themselves far less in medical expenses than do the smokers, the over-eaters, the people who eat lousy food, and a few other types who cause themselves and us medical costs.

Rich Walden said at February 1, 2005 11:39 AM:

Unfortunately the same thing is happening to people who turn 65 and do not want to retire. They are being forced out of company medical plans into medigap policies which do not offer near the benefits as the mainstream policies such as Blue Cross/Blue Shield. Several states allow this practice, some don't. I keep reading that there will be a shortage of workers after the baby boom. Will this practice continue? Already the full social securtity retirement age is creeping up. There will have to be a chance here in one thing or the other.

Pico said at February 2, 2005 11:37 AM:

Puritanical intolerance in a new incarnation. The materialist puritans want to punish people who deviate from the health and lifestyle orthodoxy.

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