When You Already Pay for a Tobacco Cessation Program?Yuki Yang, Vice President of Client Services
In my last blog post, I gave a few examples of the types of premium differentials we often see our clients implementing at their worksite to encourage tobacco users to quit. I talked about the fact that tobacco users face an addiction they know that tobacco use is not good for their health, yet they have a very difficult time quitting. I spoke about how an outside motivator, such as a financial incentive, can often help move an addict towards getting the help that they need to quit.
Today Id like to address a common question that many human resources professionals may face: Why should your organization pay for an incentive when youre already paying for a tobacco cessation program?
The answer is fairly easy if you are looking at long-term return on investment.
Tobacco use takes a toll on healthcare costs.
Tobacco users cost employers $196 billion annually, an estimated $7,874 per employee per year in medical and productivity costs. The national average tobacco use prevalence is 20 percent. This means that a company of 10,000 employees (and their eligible dependents) incurs an estimated $16,417,480 per year in excess costs associated with smoking. (Read our business case for tobacco cessation.)
Tobacco use takes a toll on employee productivity.
Employees tobacco use costs businesses even more when absenteeism, lost productivity due to smoke breaks, and workers compensation claims are included. Productivity and lost earnings because of smoking-related disease and premature deaths cost $92 billion a year making up almost half of the total employer spend on tobacco users. Reducing tobacco prevalence within an organization impacts cost exposure more than the reduction of any other risk factor.
Premium differentials can offset costs.
When implemented successfully, a positive incentives program is actually a viable option for offsetting the costs associated with a tobacco cessation program and can potentially be cost-neutral. Many employers find that charging smokers a premium differential or surcharge can help pay the healthcare costs of non-tobacco users as well as fund the program for those who are trying to quit.
Incentives lead to increased participation rates in tobacco cessation programs.
At Alere Wellbeing, we've seen evidence that clients who implement premium differentials see quit rates that are 50% higher than those without premium differentials. Higher program participation rates lead to more people quitting successfully, which in turn leads to a higher return on investment.
Questions about worksite testing for nicotine?
Check out our post with attorney Julie B. Ross where she discusses legal issues and best practices for workplace nicotine testing.