December 22, 2006
HEALTH INSURANCE PREMIUMS FOR SMOKERS
By: Janet L. Kaminski, Associate Legislative Attorney
You asked if Connecticut law prohibits insurers or employers from factoring in whether a person smokes when determining insurance premiums or employee contributions for health care benefits.
Connecticut law does not explicitly prohibit insurance companies from using smoking as a rating factor when setting premiums for health insurance policies (individual or group) except for small employer groups (1 to 50 employees), according to the Insurance Department. Insurers are required to community rate small employer groups without any reflection of health status or claims experience (CGS § 38a-567(5)(B)). Such rates may only be adjusted for certain case characteristics (e.g., age, gender, industry classification) (CGS § 38a-567(5)(A)). State law does not require insurers to file underwriting guidelines for health insurance products. For related OLR reports, see 2004-R-0916 and 2005-R-0159 (attached).
Connecticut law prohibits employers from discriminating against any individual who smokes outside the workplace with respect to compensation, terms, conditions, or privileges of employment (CGS § 31-40s). The Connecticut Department of Labor (DOL) interprets this law as not prohibiting an employer from having smokers contribute more toward health benefits than non-smokers due to preemption by the federal Employee Retirement Income Security Act (ERISA). To our knowledge, this issue has not been litigated in a Connecticut court. DOL is continuing to analyze the issue. If their conclusion changes, we will revise this report.