With all the recent debates about the safety of e-cigarettes and the need for state regulations for the industry, one thing is certain: the vast majority of experts and doctors agree that they offer a far safer alternative over tobacco analogs, because instead of the thousands of chemicals and tar the only thing these devices deliver is vapor. Even Mitch Zeller, the director of the FDA’s Center for Tobacco Products said in a recent speech that ‘If we could get all of those people [who smoke] to completely switch all of their cigarettes to noncombustible cigarettes, it would be good for public health.’
However, while e-cigs are generally viewed as a safer alternative to smoking, health insurance companies may use them as an excuse to charge up clients’ premiums and generate more profit. President Obama signed the Affordable Care Act into law on March 23, 2010 and it states that insurance providers can legally increase the cost of premiums under the four following factors: age, geographic location, family size and tobacco use.
While 10 states currently forbid or restrict insurance companies from raising premium costs based on a client’s tobacco use, they may increase premiums for smokers in the other states by as much as 50 percent. A person is considered a smoker if he or she makes use of any tobacco product, including cigarettes, cigars, chewing tobacco, snuff, and pipe tobacco, four or more times a week within the past 6 months.
In a survey conducted by Munich American Reinsurance Company at the Association of Home Office Underwriters (AHOU) Conference in Indianapolis, 74 percent of polled underwriters felt that e-cigarettes should be classified as a tobacco product, whereas only 30 percent agreed that these devices could be labeled a smoking cessation tool.
Additionally, 82 percent of life insurance companies with an underwriting policy in place for electronic cigarettes consider them as tobacco products. Similarly, 76 percent of underwriters who work for an insurance company currently without a specific policy for ecigs think they should be treated as tobacco products.
‘At the moment, there is no way to distinguish an e-cigarette user from a tobacco smoker via cotinine screening, a routine test for most insurance applicants,’ said Bill Moore, Vice President of Underwriting and Medical for Munich American Reassurance Company. ‘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.’
‘As the e-cigarette industry continues to grow, it poses a number of major questions for the insurance industry, many of which do not have black and white answers,’ Moore added. ’Over the last several years, many life insurance companies have begun to adopt underwriting policies with respect to e-cigarettes, but as illustrated from our survey data, those companies are still in the minority.’
It’s still early to say if puffing on your e-cig might cause an increase in your premium, but at the moment most companies include verbiage related to cigarette smoking in their forms, without specific details to ecigs.