Could smoking cost you a job?

By Jackie Ford, MarketWatch

As the country debates whether health care "reform" will include government intrusion into personal health decisions, another party is already peering over the shoulder of many an American patient.

It is not the government and not a health insurance company. The third leg -- and maybe the political third rail -- of health care is your employer.

Americans spend a whopping $2.5 trillion on health care and related expenses each year, accounting for more than 17% of the nation's gross domestic product.

Employers pay in excess of 70% of the total cost of health insurance premiums each year. They also carry the additional burden of health-related absenteeism and reduced productivity.

With so much money at stake, it is no surprise that employers are increasingly looking beyond insurance company negotiations for ways to cut these expenses. Rightly or wrongly, many are turning now to another primary source of rising health care costs: workers themselves.

The facts are simple: Lifestyle choices, particularly those related to eating and smoking, play a major role in the development of chronic diseases, which in turn account for some 75% of all health care spending in the United States.

For example, smokers' health care costs run about 40% higher than nonsmokers' costs. Preventable illnesses caused by smoking and obesity annually account for more than $100 billion in overall health care spending -- and some experts estimate that smoke breaks and smoking-related absences cost employers an additional $100 billion in lost productivity every year.

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So it's no surprise that some employers want to exclude smokers and overeaters from their payrolls and, by association, from their health plans. Is it legal for them to do so? As is so often the case with any question of law, the answer is: It depends.

Some states would allow it

There is no federal law prohibiting workplace discrimination against smokers. Thus, the legality of employer smoking bans is largely a matter of state law. While more than 20 states prohibit employers from taking action against smokers, many other states allow it, either explicitly or as part of the general concept of at-will employment.

In those states, an employer is well within its legal rights to refuse to hire someone who chooses to smoke and can fire an employee who refuses to stop smoking either on or off the job.

Some states, including New York and California, generally prohibit employers from taking action against employees for legal off-duty activities such as cigarette smoking that are not directly related to their job duties. But some courts have rejected the idea that employer inquiries about off-duty smoking constitute illegal intrusions into the private lives of workers.

A federal court in Massachusetts recently upheld an employer's termination of a new employee who had tested positive for nicotine. The court reasoned that, since the employee had never tried to keep his smoking a secret, he could hardly claim that his "privacy" was invaded by the company's smoking-related action against him.

Obesity is a more complex issue

Whether an employer can refuse to hire an obese applicant or can require an employee to choose between losing weight and losing a job is a more complex question. Morbid obesity may constitute a disability under the Americans with Disabilities Act and parallel state laws.

That means an employer can't take action against an otherwise-qualified applicant or employee solely on that basis. Some states and municipalities -- including Michigan and the District of Columbia -- more broadly prohibit discrimination based on "appearance" as well. In those jurisdictions, an employer would likely be prohibited from firing or refusing to hire solely on the basis of weight.

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While the majority of employers do not ban either smokers or overeaters, many use wellness programs to reward their workers who make healthier choices. Some provide cash rebates or reductions in premiums in exchange for weight loss, while others underwrite smoking cessation programs.

Whether it involves smoking Virginia Slims or chowing on Big Macs, privacy-minded Americans grow nervous when their employers have a say in what they do on their nonwork time. But as long as employers keep footing so much of the bill for off-the-clock lifestyle choices, many will continue to push their employees to bring down those costs themselves.

Published Oct. 14, 2009