Can we charge higher premiums for smokers’ health insurance?

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in Employee Benefits Program,Human Resources

Q. I know North Carolina has a smokers’ rights law. Does this law, or any other law, prevent our company from charging smokers and nonsmokers different group health insurance premiums?

A.
No. Employers are allowed to offer health, disability or life insurance policies that distinguish among employees for type and price of coverage, based on use of lawful products such as tobacco.

An employer must, however, show: (1) that the differential rates reflect actuarially justified differences in the provision of benefits; (2) that employees received written notice of the differential rates; and (3) that, if the employer contributes any amount toward employees’ premiums, the employer does not differentiate among employees in its contributions.

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