I am thinking of offering my employees health insurance, some of them smoke, will this affect the cost?

How much more can I expect to pay for the smokers?
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Health insurance premiums are calculated by determining the claims experience of your group and then modeling that and other age and demographic factors into a rate that is expected to cover the claims liability for a given plan year. Although Group Plans are designed to help absorb the cost of individuals with higher risks/expenditures, it is erroneous to state that there is no effect on the rates. In fact, to the contrary, since statistically smokers will increase your overall plan costs, they will therefore increase your claims experience and inflate the cost needed to cover that liability. In other words - higher rates. Offering a credit or discounted rate to non-smokers; or for smokers enrolling in an accredited smoking cessation program, are both ways to help reduce the risk of cost to your plan. This, and other like Preventive Care measures, are your best way of controlling plan costs, regardless of the size of your insured population.
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