Electronic cigarettes, or vape pens, don’t contain tobacco and they don’t produce smoke, yet they do contain nicotine, and this has left insurers and employers in a quandary. Should “vapers”, as these people are commonly called, be categorized as smokers, and therefore be penalized with higher insurance rates?
The Categorization Quandary
Despite the growing popularity of vapers (they’ve gotten so popular that even icons like Leonardo DiCaprio are comfortable “vaping” in public), they present a somewhat troublesome gray area to insurance companies. This has left employers wondering if their employees who vape are considered smokers and if so, by whom.
Some businesses have weighed-in on the matter. According to the Wall Street Journal, Wal-Mart and UPS, for example, categorize vapers as smokers, and accordingly charge them higher insurance premiums. Cleveland Clinic, which refuses to hire smokers, similarly won't hire e-smokers, while CVS Caremark doesn't allow employees to use e-cigarettes at its corporate campuses. Starbucks bans e-cigarettes for employees and customers; and almost every state has enacted disparate legislation to regulate where e-cigarettes may and may not be used.
Most people who aren’t forced into a binary view of the matter consider users of electronic cigarettes to straddle the halfway point between smoking and quitting. But many employers, health insurers and policymakers who must reach a consensus on the matter still have not fully made up their minds.
Exacerbating the problem is inconsistent terms and language used to ascertain if someone is a “smoker”; it differs from carrier to carrier. Some insurers use the term “smoking” or “tobacco usage”, while others used the broader term “tobacco products” which is meant to encompass, beyond cigarettes, chewing tobacco, cigars and pipes. Using a phrase such as “nicotine usage”, if that’s the root concern to an insurer, could potentially clear up some of this confusion, though nicotine gum and nicotine patches, recognized as legitimate smoking cessation tools, would then suffer the same fate.
Uncharted Territory
Because vaping is so new, there isn’t a real consensus among health professionals about whether e-cigs pose long-term risks. Recently, after Leonardo DiCaprio was photographed vaping at the SAG Awards, the American Lung Association condemned his actions:
"Without FDA regulation and review, we simply don’t know what is in e-cigarettes. However, in initial lab tests conducted in 2009, the FDA found detectable levels of toxic cancer-causing chemicals—including an ingredient used in antifreeze—in two leading brands of e-cigarettes and 18 various cartridges. A review of studies found that levels of toxins in e-cigarette aerosol varied considerably within and between brands. A 2014 study found that aerosol from e-cigarettes with a higher voltage level contains more formaldehyde, another carcinogen with the potential to cause cancer."
Condemnation without consensus, however, just isn’t helpful.
Does The ACA Shed Any Light On Things?
The Affordable Care Act allows health and life insurance companies to charge tobacco users as much as 50 percent more in health premiums, yet it doesn’t actually specify whether this tobacco surcharge includes users of electronic cigarettes. But neither does the ACA list e-cigs as recognized Nicotine Replacement Therapy (NRT).
Looking past the ACA and to other health and governmental organizations, the FDA hasn’t done more than propose that e-cigarettes be classified as tobacco, and the Centers for Medicare and Medicaid Services have yet to chime in on the subject.
If the FDA listens to various health organizations, e-cigarettes will most certainly be classified as tobacco products. The World Health Organization, the American Heart Association, the American Public Health Association, the American Association for Cancer Research and the American Society of Clinical Oncology all want strict regulations equaling tobacco. A minimal bright spot for e-cig proponents is that all these organizations appear to support further research into whether e-cigarettes are suitable for NRT.
Where Things Shake Out With Insurers
With insurance companies left to decide for themselves, policies are all over the board.
Life Insurance: Life insurance companies have taken a strong lead on the issue. Up to 90 percent of all underwriters consider e-cigarettes the same as tobacco. They also consider NRTs to be tobacco use, and they require tests before insuring anyone. They say a person must be nicotine free for at least a year to qualify for nonsmoker rates, with some requiring up to three years. Prudential is the only major carrier that doesn’t consider e-cig users to be smokers.
Health Insurance: A few, but not many health insurance carriers currently don’t classify e-cigs as tobacco use. They include UPMC Health Plan, Anthem Blue Cross and Blue Shield of Missouri, and Coventry Health Care, which is part of Aetna.
Long-Term Care: Most LTC companies are not looking at nicotine use as a major problem. While some do charge more for cigarette usage, those same insurers don’t charge more for cigar and pipe smoking, and tend to treat those who vape in much the same manner.
While home and auto insurance might not be of interest to employers reading this post, for the sake of completeness we thought we’d add in their stance on the subject.
Home & Auto: Very little has been published about how underwriters in these two insurance categories handle vapers, yet most all carriers at present penalize traditional smokers. The reasons for this are different, by category. For homeowners insurance carriers, a home occupied by a smoker has an inherently greater chance of burning to the ground than a home occupied by a non-smoker. So non-smoking customers, on average, pay 10 percect less in premiums than those who light up. Since e-cigarettes are non-combustible (except for the rare battery flare-up) one would think this surcharge should be abated for e-cigarette users who have really quit smoking
As for auto insurance, the typical smoker pays an average of 5 percent more than a non-smoker primarily because smokers are perceived as more prone to engage in higher risk activities than non-smokers and because distraction behind the wheel is one of the leading causes of car accidents, and people who smoke when they drive have to sacrifice a percentage of their full attention from the road around them. One could argue that e-cigarettes are far less distracting and might even indicate a willingness on user’s behalf to tame their higher risk behaviors.
The Bottom Line for Employers
The bottom line for employers — especially those considering offering smoking cessation assistance as part of workplace wellness programs — is that as of now, e-cigs are not considered by most carriers to be different from cigarettes and other tobacco products. This means that vapers will, in all likelihood, be considered as “smokers” while they use these devices.
Get A Carrier’s Official Policy In Writing
Finally, until this matter is settled once and for all, it would be wise to get each carrier’s official policy in writing. This will help you and your workforce avoid unjust claim denials down the road.
Contact us for more information about this topic and others which will help you better assess risk while you chart a course towards wellness programs which will help your employees live healthier lives.
Editor's Note: Make sure to check-out our other blog post on e-cigarettes, “Should Vaping be Encouraged as a Smoking Cessation Tool?”
Editor's Note 2: Since publishing this blog post, the FDA, on May 5, 2016, announced that it was assuming regulatory authority over e-cigarettes. The tough set of rules announced that day will be phased-in over a three-year period.