OBJECTIVES: To determine the incremental direct health care and indirect work loss costs experienced by employer-payers for patients diagnosed with seborrheic dermatitis (SD). METHODS: A de-identified claims database consisting of 5.1 million covered lives from 31 Fortune 500 self-insured employers over the period 1998-2005 was used. Each SD patient was matched with three controls based on age and gender. The average monthly direct health care costs (i.e., medical & pharmaceutical costs) were computed for the respective groups. For the subset of patients who were active employees, the indirect costs of lost work time were calculated for each group, as measured by employer disability payments and sick leave time multiplied by the employee's wage. In addition, a multivariate two-part regression was used to isolate the cost increase attributable to SD by controlling for age, gender, year, comorbidities, and organ transplantation. RESULTS: The univariate analysis showed that the SD patients (N=6,860) were associated with higher medical and pharmacy costs than the control group (N=20,580) by an average of $136 and $62 per person per month, respectively (medical: $412 vs. $277, p<.0001; pharmacy: $139 vs. $76, p<.0001), bringing the total increase in health care costs to $198 per person per month ($551 vs. $353, p<.0001). In the subset of active employees, the SD group (N=1,666) was associated with a higher indirect work loss cost of $50 per person per month ($132 vs. $82, p<.0001) than the control group (N=4,103). For each cost category, a statistically significant cost increase for SD patients was confirmed through the multivariate analysis (adjusted incremental direct cost=$62, p=.005; adjusted incremental indirect cost=$44, p=.042). CONCLUSION: SD was associated with a statistically significant increase in health care and work loss costs. The multivariate analysis indicated that the total direct and indirect cost increase was approximately $106 per person per month.