Insurance – Distinguishing Between Smokers and Non-Smokers

Illinois law allows employers to make distinctions between smokers and non-smokers with respect to insurance benefits. Illinois, like many other states, has a “smokers’ rights” law (820 ILCS 55/1) which prohibits employers from: (1) refusing to hire, (2) discharging, or (3) disadvantaging with respect to compensation, terms, conditions or privileges of employment, any individual because he or she smokes or uses other lawful products off of the work premises during non-working hours.

However, contrary to what some employers believe, the same law creates an exception for insurance benefits. The legislation specifies that it is not a legal violation for employers to offer, impose, or have in effect a health, disability, or life insurance policy that makes distinctions between employees for the type of coverage or the price of coverage based upon the employees’ use of lawful products, provided that:

1. The differential premium rates charged to the employees reflect a differential cost to the employer; and 2.   Employers provide employees with a statement delineating the differential rates used by their insurance carriers.