E-Cigarettes and Your Insurance Premiums
Does electronic smoking puff up your insurance rates? Get answers and advice from
the experts at VaporFi
For years, smokers have been slammed with higher health insurance premiums. To make matters
worse, these rates are going up even higher because of the Affordable Care Act—more commonly
referred to as ObamaCare.
The penalties assigned to smokers by insurers are steep. Under ObamaCare, smokers, on
average, will pay 50% more than non-smokers for the same health plans due to a "tobacco
surcharge" (beginning in 2015). And unfortunately, smokers who seek out health insurance
privately will not find the situation much better outside the public marketplace.
Inflated insurance premiums for smokers is not anything new, and it kind of makes sense
considering that tobacco use greatly increases a person's susceptibility to laundry list of
medical problems, including cancer, strokes and heart conditions. These health issues, along
with the financial strain, is giving smokers yet one more reason to switch to customizable e-cigarettes.
Many people agree that e-cigarettes are a better alternative to tobacco products, but what
about insurers? Keep reading to learn about how electronic smoking can impact your life,
your health, and your insurance payments…
Life Insurance – "It's all smoking," they say
A 2014 survey by Munich American Reassurance Company found that of the
150 life insurance underwriters queried, nearly nine in 10 think that people who use
e-cigarettes should be lumped in with tobacco smokers.
Why? Besides the fact that it puts more cash in insurers' deep pockets, the
legalities surrounding electronic smoking are still hazy and unclear. Specifically, insurers
are concerned about three factors:
- E-cigarettes are new. Because e-cigarettes have only been in the U.S.
since 2007, insurers are unsure about their long-term benefits and whether to classify
them as an effective smoking cessation tool or an unhealthy nicotine delivery device.
- Electronic smoking is controversial. There is little to no general
consensus on electronic smoking, which makes insurers uneasy. Proponents advocate the
use of e-cigarettes to provide safe alternatives to smoking, while opponents argue that
the devices get kids and non-smokers addicted to tobacco.
- The devices are unregulated. Lastly, the Food and Drug Administration
has been slow to make a decision about the regulation (and taxation) of e-cigarettes. In
April 2014, the FDA* finally proposed to extend its oversight to include electronic
smoking devices – however, the timeline for implementing this final rule remains up in
the air. Learn more about the most recent FDA* regulations on e-cigarettes in our
Until these issues are resolved, most life insurance carriers are unlikely to shift their
stance on e-cigarettes and their connection to tobacco smoking. As Munich RE states: "While
the long-term health risks associated with e-cigarettes remain unclear, most insurers are
erring on the side of caution in order to appropriately price and manage risk."
Health Insurance & Obamacare – A "Grey" Area
Like life insurers, most health insurance carriers are taking the cautious approach to
electronic smoking. Under the guidelines of President Obama's new healthcare system,
insurance companies are only allowed to take four factors into consideration when selling
health plans: a person's age, geographic location,
family size and tobacco use.
However, unlike determining an applicant's age and where they live—fairly straightforward
questions—regulating tobacco use is a bit trickier. When quoting a premium, most health
carriers simply ask ambiguous questions that leave it up to the applicant whether or not
they feel they should report their electronic smoking habit.
For instance, when asked "Do you use tobacco products?", electronic smokers can truthfully
answer no since e-cigarettes don't contain tobacco. Similarly, since the FDA* does not
regulate e-cigarettes as such, they would not technically qualify under the question "Do you
use any smoking cessation products?"
Furthermore, the American Cancer Society states that ObamaCare has no formal guidelines for insurance
companies in regards to e-cigarette users, leaving it up to each insurer to choose their own
"The Affordable Care Act does not specify e-cigarette use for purposes of
cessation coverage or tobacco surcharge application. The lack of clarity may allow health
plans to try to add the surcharge for e-cigarettes."
Ultimately, it all boils down to your definition of a "smoker" – or in this case, how your
insurer defines the term too. Some insurance carriers simply avoid the confusion by turning
a blind eye to electronic smoking altogether.
The Wrap Up
While this article is not intended as legal advice, and electronic smokers should seek out
additional research and counsel before completing an insurance application, hopefully it
helped provide a clearer picture of the added costs of smoking and where e-cigarettes
currently fit into the transformation of the U.S. healthcare system.
If you're considering an alternative to smoking, you can find more information about
electronic smoking by checking out our blog and knowledge center. Also, feel free to shop in our
online store to pick out your very own customizable
* VaporFi products are not approved by the Food and Drug
Administration ("FDA") nor does the FDA endorse or deem these products to be safe for use by