Peach State Slaps on $40 Employee Smoking Surcharge

May 13, 2005 (PLANSPONSOR.com) - Georgia teachers and other state employees who smoke will have to dig deeper into their pockets starting July 1 to pay for their share of health insurance.

That’s because the state has slapped on a $40 surcharge for workers who admit to lighting up or having used tobacco in the last year, according to an Atlanta Journal-Constitution report. About 650,000 people are on the state health insurance plan.

State employees are expected to be honest about their smoking habits when they enroll for insurance coverage, said Tim Burgess, commissioner of the Georgia Department of Community Health. Those caught lying will lose their insurance for a year, he said.

Burgess said it’s unclear exactly how much money the tobacco surcharge will raise because the state does not know how many of its employees or their spouses smoke.

West Virginia, Alabama and Kentucky already impose a surcharge on health insurance for employees who smoke, the Journal-Constitution said.

Georgia Senate Majority Leader Tommie Williams said the surcharge, which helps limit the increase in premiums for other state employees, was adopted to fill a projected $400-million shortfall in the insurance fund.

“Smokers are very expensive. In the private sector, you pay more if you are a smoker and you pay more for your spouse,” Williams said, adding that many state employees didn’t realize the insurance system was self-insured, meaning premiums must go up to meet rising health costs and claims.

Governor Sonny Perdue had originally proposed a 13% premium hike, but lawmakers cut it to 9.5%. Perdue’s initial recommendation of a $9 per month surcharge estimated a savings of $1.7 million in insurance costs. Legislators increased the surcharge to $27, which would have generated $5.1 million.

Tim Connell, director of the state Office of Planning and Budget, said the surcharge was bumped up to $40 because the legislators’ plan still left a $4 million health program shortfall.

During the last three years, state employees have experienced double-digit increases in their health-insurance premiums and little in the way of pay increases, the Journal-Constitution said.

Earlier this year, a decision by a Michigan company not to even hire smokers generated national news with critics charging that the policy is blatantly discriminatory. Opponents say that such a personnel approach – which also forces all employees to be tested for tobacco use – goes legally overboard because it regulates smoking, a legal activity (See Lawyers Smolder over MI Firm’s No-Smoking Policy ).

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