Costs to employers
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Employee smoking results in significant direct and indirect costs to employers. Reducing the number of employees who smoke can save your company a lot of money!
Here are just a few of the employer costs increased by employee smoking:1,2
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Health insurance costs and claims |
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Life insurance costs and claims |
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Lost productivity |
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Absenteeism |
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Maintenance costs |
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Air cooling, heating, and ventilation costs |
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Recruitment and retraining costs resulting from loss of employees to smoking-related death and disability |
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Worker's compensation payments and occupational health awards |
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Disability retirements |
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Litigation costs |
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Accidents and fires (plus related insurance costs) |
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Property damage (plus related insurance costs) |
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Smoke pollution (leading to increased cleaning and maintenance costs) |
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Illness and discomfort among nonsmokers exposed to secondhand smoke |
Things you should know about smoking and your bottom line:
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The impact that smoking has on health, life, fire, and property is often reflected in the response made by insurance underwriters. Dozens of insurance companies offer substantial discounts on life, disability, and medical insurance policies for nonsmokers. |
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CNA recently offered $500,000 in life insurance to 30-year-old nonsmokers for $425. The cost of the same coverage for smokers is more than twice that amount: $935!1 Having a smoke-free workplace may enable you to negotiate lower fire and property insurance premiums with your insurance company. |
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Smoking causes millions of dollars damage due to fires every year. In 1996, the total property and contact losses for fires caused by smoking was over $10.6 million! Between the years of 1993 and 1996, the National Fire Protection Association reported $391 million in direct property damage caused by smoking-related fires.1 Eliminating smoking in your workplace can greatly reduce your risk of incurring property damage costs related to fires. |
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When the Union Camp Corporation evaluated the health costs of 700 of their employees in 1992, they discovered that nonsmoking employees cost the company $462 less in health care costs than smoking employees. Among 400 production employees for whom there was absenteeism data, each nonsmoker saved the company $284 of sick pay!1 |
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A study of 2,500 postal employees published in the American Journal of Public Health found that the absentee rate for smokers was 33% higher than for nonsmokers.1 |
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Smokers are absent from work 50% more than nonsmokers. They're also 50% more likely to be hospitalized and have 15% higher disability rates.1 |
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Smokers miss more work than non-smokers due to sickness. A recent study of 300 booking clerks at a large U.S. airline found that smokers are absent from work for sickness as many as 6.16 days per year on average, compared with 3.86 days for those who never smoke.5 |
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Employees who take four 10-minute smoking breaks a day actually work one month less per year than workers who don't take smoking breaks.1 |
Smoking employees cost your company an average of $1,429 per smoker per year in increased health care costs over nonsmoking employees (not to mention the costs of lost productivity and absenteeism). Offering your employees assistance in their quit-smoking efforts is a worthy investment. Implementing a smoking cessation program for your employees only costs on average $45 per employee per year. For every smoker at your company who became a nonsmoker, the company would save an average of $1,382 per employee!3
| $1,429 | →cost of tobacco use per employee |
| - $45 | →cost per employee of providing tobacco cessation in the workplace |
| $1,382 | →Amount saved per smoking employee who quits |
Smokers cost far more than nonsmokers in insurance and hospital costs. As you can see from the graphs below, the costs per insurance claim for nonsmokers are far lower than for moderate and especially heavy smokers. Hospital inpatient costs for nonsmokers are also far lower than for smokers.
Insurance costs per claim4
Hospital inpatient costs4
References:
1. Center for Health Promotion and Publications. The Dollar (and sense) Benefits of Having a Smoke-Free Workplace. Lansing, Michigan: Michigan Tobacco Control Program; 2000.
2. Centers for Disease Control and Prevention: Office on Smoking and Health, USDHHS, Wellness Council of America, American Cancer Society. Making your workplace smokefree: A decision maker's guide 1996.
3. NC Prevention Partners. Buying Prevention Related Benefits: A 5-Step Guide for NC Employers. Available at: http://www.ncpreventionpartners.org/basic/eguide.htm. Accessed 3/19/2003.
4. Control Data Corp. Minneapolis, MN and Milliman & Robertson Inc., Brookfield, WI. Health Risks and Behavior: The Impact on Medical Costs 1987.
5. Halpern MT, Shikiar R, Rentz AM, Khan ZM. Impact of smoking status on workplace absenteeism and productivity. Tobacco Control. Sep 2001;10(3):233-238.
This page was last updated on April 19, 2004. Copyright © 2003 Tobacco Prevention and Control Branch, NC Department of Health and Human Services. All rights reserved. Click here for disclaimer.