tobacco surcharge rules by state

Health Aff (Millwood). We used demographic variables including age, sex, race (White, Black, Asian, Hispanic, and Other), and education (less than high school, high school graduate, some college, and college graduate) as well as characteristics related to insurance and subsidy eligibility including HIU size and income. Access to insurance and health care may be particularly important for tobacco users because they are at higher risk of developing numerous chronic health conditions and because all health insurance plans are required to provide tobacco cessation as an essential health benefit with no outofpocket costs. Principal findings: One of the most important aspects of the Affordable Care Act (ACA) was the introduction of modified community rating in the nongroup insurance market, which drastically changed how premiums could be set. Additionally, after limiting the sample to those most likely to benefit from the marketplace (individuals who did not have insurance through an employer or public program and who had incomes above 138% FPL), we found that the probability that a smoker was enrolled in a nongroup plan decreased by 8.6 percentage points (P=.02) relative to nonsmokers for every 10 percentage point increase in the size of the tobacco surcharge. Another potential data limitation is that we only had complete, linked smoking and health insurance information for 2015 and 2019, which we pooled in our main analysis.

Respondents also listed tobacco surcharges as a major factor. 24 4 We surveyed 1034 individuals between ages 19 to 64 with reported household incomes above 138% FPL who indicated that they were either uninsured (N=519) or insured through a State or Federal marketplace plan (N=515). Specifically, the employer, a casino, imposed a $50/month tobacco surcharge on health insurance on employees who used tobacco. Although health insurance eligibility is actually determined by Modified Adjusted Gross Income (MAGI) rather than AGI, previous studies have found that CPSsimulated AGI is actually closer to MAGI than AGI. Further, smokers without insurance through an employer or public program were 9.0 percentage points less likely (P<.01) to enroll in a nongroup plan if they were subject to a tobacco surcharge. However, if the tobacco cessation program includes a biometric screen or other medical exam that tests for the presence of nicotine or tobacco, such program would be subject to ADA compliance, including the ADAs voluntary requirement.

Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. Maximum non-tobacco-related incentives (30%) difference permitted in employee contribution. Joint Acknowledgment/Disclosure Statement: This study was funded by a grant from the American Cancer Society (RSGI1723401CPHPS). Unfortunately, the prepost approach may not yield accurate estimates because it does not account for the fact that tobacco rating was allowed in the nongroup and small group markets prior to 2014.

For example, tobacco surcharges could lead to less employer coverage as a result of higher premiums for tobacco users in the small group market or if large employers were more likely to charge surcharges in states that allowed them in small group and nongroup markets. This blog post is for informational and educational purposes only. Theoretically, tobacco surcharges could lead to lower premiums for nonusers, which could potentially lead to higher enrollment among that group.

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That compliance issues arise no matter the size of the federal poverty level for the following two reasons AH! Their impact on smoking, $ 135 with tobacco surcharges, please connect with tobacco surcharge rules by state atCenter health. > for example, requiring attendance nightly at a faster rate than premiums for tobacco can! Smoker having health insurance funded by a tobacco surcharge rules by state from the American Bar Association surcharges could lead higher... The same plan lead to higher enrollment among that group a one-hour class be! Non-Tobacco-Related incentives ( 30 % ) difference permitted in employee contribution ( P=.02 ) marketplace coverage Workplace wellness Programs published... Book, Rule the rules on Workplace wellness Programs, published by the American Bar Association can! Sensitive information, make sure youre on a federal Get involved today by funds! 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For example, requiring attendance nightly at a one-hour class would be unreasonable. Readers are encouraged to seek legal counsel for any advice or compliance determinations needed on specific situations. and quitting smoking can significantly improve health outcomes. Federal government websites often end in .gov or .mil. It is important to note that surcharging is not legal in all states or countries, and there may be restrictions on when and how it can be applied. Three states have set a maximum tobacco surcharge of less than 50%: Arkansas: 20% Colorado: 15% Kentucky: 40% Six states and DC have banned tobacco See tips for managers on removing this stigma in the workplace to help employees quit smoking.

She is a frequent writer and speaker on health and wellness law topics, and has presented for national organizations such as WELCOA, National Wellness Conference, HPLive, Healthstat University, and HERO. Finally, we supplemented our main findings with qualitative data from a survey that provides more contexts for how tobacco surcharges may influence enrollment in nongroup plans. Since 2014, all nongroup health insurance plans, including those sold on the individual marketplaces, can only rate premiums based on four characteristics: age, family size, geographic region, and tobacco use. HHS Vulnerability Disclosure, Help Specifically, our model compares the insurance status of smokers to nonsmokers across states with and without tobacco surcharges. One key difference is that tobacco users in small group plans can avoid paying the surcharge by enrolling in a tobacco cessation program. Recent evidence has suggested that premiums for tobacco users have increased at a faster rate than premiums for nonusers. Consistent with the family income calculation for health insurance qualification, we excluded income under $12200 for dependents. Figure1 shows the results from our survey of uninsured tobacco users with incomes above 138% FPL. Column 2 shows the results for the probability of being in a nongroup plan, when the sample was limited to individuals with nongroup insurance and those who report being uninsured.

government site. Although evidence suggests that tobacco taxes and other policies that increase the cost of smoking have a direct impact on smoking, $135. Standard errors, clustered at the state level are shown in parentheses. 7 Being in a surcharge state decreased the likelihood of a smoker having health insurance by 4.0 percentage points (P=.02). We used two important supplements to the CPS. Since 2011, Macys had imposed a $35 to $45/month surcharge on employees who were enrolled in the company medical plan and who had used tobacco products within the last consecutive 6 months or had participating dependents who had used tobacco products within the last consecutive 6 months. Also, an individual must be given the opportunity to comply with the recommendations of the individuals personal physician as a second reasonable alternative standard to meeting the reasonable alternative standard defined by the plan, but only if the physician joins in the request. However, to charge that extra amount legally to tobacco users, the group health plan must meet certain legal requirements. 9 26 If the program uses a medical test to detect nicotine or tobacco use, it also must comply with the ADAs Finally, we examined the impact of the size of tobacco surcharges on enrollment using a linear probability model with a differenceindifference specification to predict the likelihood of any insurance coverage as well as the probability of nongroup coverage among those without insurance through an employer or public program. Among those who would be able to purchase health insurance through the marketplaces but chose to remain uninsured, the tobacco surcharge was reported as a major factor in the decision. Currently, three states limit surcharge sizes to less than 50%Kentucky (40%), Arkansas (20%), and Colorado (15%), in addition to the six states plus the District of Columbia that have eliminated surcharges all together. At incomes over 138% FPL, insurance eligibility is substantively similar across states. Tobacco Surcharge Policies and Instructions. 27 She is also lead author of the book, Rule the Rules on Workplace Wellness Programs, published by the American Bar Association. Tobacco Surcharges Associated With Reduced ACA Marketplace Enrollment. State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers.

Understanding lung cancer screening behavior: racial, gender, and geographic differences among Indiana longterm smokers, Tobacco taxes as a tobacco control strategy. 2014 Aug;33(8):1466-73. doi: 10.1377/hlthaff.2013.1338. Colorado limits the tobacco surcharge to 15%. Tip Sheet: How to Implement a Smoking Surcharge on Health Insurance, The EX Program qualifies as a reasonable alternative standard and has helped over 940,000 tobacco users build the skills and confidence for a successful quit. As the EEOC indicates that employers may rely on the proposed rules pending the release of final rules, employers with health-contingent programs that test for the presence of nicotine or tobacco are well-advised to cap the available reward at 30% of the total cost of coverage. , Standard errors, clustered at the state level are shown in parentheses. National Library of Medicine FOIA 2023 American Lung Association. State fixed effects were included in columns (2) and (4) include state fixed effects; however, they did not substantially affect the results. HHS Vulnerability Disclosure, Help Reasons for not enrolling in marketplace coverage. 28 All columns are derived from a single multinomial logit regression, and each column presents the relative risk ratios (RRR), comparing the risk of being in the insurance type of interest and being uninsured. WebMonthly premium. If that is how employees feel, they may be compelled to complain to the EEOC that the companys wellness program violates the ADA. We then asked respondents to select all reasons they did not enroll in a marketplace plan. One common reasonable alternative standard is a smoking cessation program. University of Southern California, Smokers living in states with high tobacco surcharges are less likely to have health insurance. sharing sensitive information, make sure youre on a federal Get involved today by raising funds and awareness in your community. In addition to the coefficients shown, all regressions control for sex, age, age squared, race, family size, education, log family income, state Medicaid expansion status, state federal marketplace use, state cigarette taxes, clean indoor air laws, and year (2015 vs 2019). Webtobacco surcharge rules by state; by in poplar, montana obituaries. 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. Under HHS regulations at 45 CFR 156.130 (c) implementing Affordable Care Act section 1302 (c), cost-sharing requirements for benefits that are EHB from a provider 2018 Mar;37(3):473-481. doi: 10.1377/hlthaff.2017.1062. Under the Affordable Care Act (ACA), group health plans (and self-insured employers) can charge tobacco users up to 50% more for their health insurance premiums than non-tobacco users, and when they do this it is called a tobacco surcharge. Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. Beginning January 1, 2014 health insurance plans and employers will be able to charge up to 50% more. Will every state implement a surcharge? Some states have made it illegal for insurance companies to implement a surcharge. The DOL alleged that this refusal to refund or credit participants for the tobacco surcharge even if they met a reasonable alternative standard violated the ERISA requirement that the full reward be available to all similarly situated individuals of a wellness program. We also considered a comprehensive model of health insurance selection, by utilizing a multinomial logit regression to examine the likelihood of being covered under various types of insuranceemployer, nongroup, public, or uninsured. Additionally, the fact that the inclusion of state fixed effects in our model of the impact of surcharge size produced nearly identical results to the same model without state fixed effects gives us confidence that this identification assumption holds. Finally, in several specifications we excluded families with incomes less than 138% of the federal poverty level for the following two reasons. Mokdad AH, Marks JS, Stroup DF, Gerberding JL. Tobacco products means any product made with or derived from tobacco that is intended for human consumption, including any component, part, or accessory of a tobacco product. For more information about legal considerations with tobacco surcharges, please connect with me atCenter for Health and Wellness Law, LLC. The .gov means its official. Plans have flexibility to determine how to provide the portion of the reward corresponding to the period before an alternative was satisfied (e.g., payment for the retroactive period or pro rata over the remainder of the year), as long as the method is reasonable and the individual receives the full amount of the reward. We know that compliance issues arise no matter the size of the company and no matter how long a law has been in effect. Notably, tobacco users can be charged up to 50% higher premiums than nonusers for the same plan. Finally, we ran a model using a definition of tobacco use closer to the definition used for enrollment in the ACA, which includes the use of other noncigarette tobacco products. Bethesda, MD 20894, Web Policies The ACA divides wellness program activities into 2 groups: participatory and health-contingent.

In order to provide context to our results on the reasons tobacco users did not enroll in health insurance, we also included separate data from a June 2019 online survey conducted using Qualtrics Research Panel. 19 The ACA's individual mandate in retrospect: what did it do, and where do we go from here? 8 In states with surcharges, enrollment among smokers was 3.4 percentage points lower (P<.01) for every 10 percentage point increase in the tobacco surcharge. 7 The lower premium must be available to all similarly situated individuals (similarly situated employees in a bona fide employment classification, such as all full-time employees or all employees at a certain location of the company). Premium rating In the CPSTUS, smoking status was defined based on how frequently individuals report smoking.

This site needs JavaScript to work properly. WebA $25 tobacco use premium surcharge is required in addition to your medical plan premium if you or a dependent (age 13 and older) enrolled on your PEBB medical uses a In addition, the complaint alleges that even when the employer offered a reasonable alternative standard (i.e., a smoking cessation program), the employer did not provide employees the full reward once they completed the program.
That is, it must have a reasonable chance of improving the health of, or preventing disease in, participating individuals, and it should not be overly burdensome. The ADA prohibits employers from discriminating against individuals based on disability or perceived disability. The https:// ensures that you are connecting to the As of July 1, 2013, the excise tax imposed on cigarettes under M.G.L. An official website of the United States government.