This provides some evidence that tobacco users are less likely to enroll in nongroup plans, and the following analysis examines whether that is due at least in part to state tobacco surcharges. The tobacco products that are counted include traditional cigarettes, cigars, chewing tobacco, e-cigarettes, vaping, and pipe smoking. The state Legislature included the surcharge requirement in the state budget signed into law on June 30, 2013. 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. The Affordable care Act allows health insurers to charge a 1.5-to-1 ratio for tobacco use. We assigned primary coverage to each respondent based on the following hierarchy: Medicare, employer, nongroup, Medicaid, other public, and uninsured. First, there is known overreporting of nongroup health insurance plan participation among Medicaid eligible respondents in survey data including the CPS. Tobacco surcharges and the state laws that limit them theoretically have varying effects on different segments of the health insurance market. [13] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. Due to a "ObamaCare smoking glitch" where programmers couldn't get the charge to calculate correctly the tobacco surcharge wasn't implemented until 2015 in many states. This table presents estimates from a differenceindifference linear probability model, examining the likelihood of the outcome of interest for smokers in surcharge states. Standard errors, clustered at the state level are shown in parentheses. The two most recent waves of the CPSTUS in 201415 and 201819 were conducted after the ACA rating rules went into effect. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. tobacco surcharge rules by state. Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. Benefits Insight. Most states, however, follow the federal law and allow insurers to impose tobacco surcharges of up to 50% but employer wellness programs must follow certain rules for those surcharges to be legal. marketing materials using the information you provide. The ERISA wellness incentive laws have been in effect in their current form since 2013, which is a long time to get into compliance. Further, we included state tobacco policy variables which we calculated from the CDC State Tobacco Activities Tracking and Evaluation System and included state cigarette taxes per pack and a measure of clean indoor air policies that were coded as 1 if the state banned smoking in all indoor bars, restaurants, and private workplaces and 0 otherwise. Plan members need to attest to their tobacco status in their Virgin Pulse portal by May 31, 2022. Columns 4 and 5 show results when nongroup plan enrollment was split by whether the plan was offered through the ACA marketplaces for the 2019 sample. As of January 1, 2021, 32 states and the District of Columbia set the minimum sales age at 21 years old; Mississippi set the minimum sales age at 21 for some tobacco products and 18 for others; two states set the minimum sales age at 19 years old and 15 states set the minimum sales age at 18 years old. Duncan MS, Freiberg MS, Greevy RA, Kundu S, Vasan RS, Tindle HA. State of Montana Health Care & Benefits Division 100 North Park Ave ., Suite 320 P.O. Massachusetts has many laws that govern tobacco: Tobacco excise taxes. In order to focus on health insurance coverage among individuals most likely to be affected by tobacco surcharges, we made several sample exclusions. Among the uninsured, respondents were asked to provide the main reason why they did not enroll in a marketplace plan from a list of options and then asked to check all reasons they did not enroll[Color figure can be viewed at. Among states that allowed a tobacco surcharge, the statewide average of the median rating area surcharge ranged from 0% to 29.6% in 2015 and 7.0% to 32.3% in 2019. These limits may not be binding in all cases, as many plans charge less than the maximum allowed, and there is substantial geographic variation in the amount of the sucharge. It is now looking at a state-by-state approach to work on rolling back . We compared insurance enrollment in states that did and did not allow tobacco surcharges, using a difference-in-difference approach to compare the policy effects among smokers and nonsmokers. Each column is a separate regression, and the interaction term between surcharge state and current smoker shows the key differenceindifference coefficient. 7 Tobacco surcharge has also been prohibited in Connecticut but only for plans that are sold through the states health insurance exchange. 19 You do not have to pay this surcharge if you attest that: Neither you nor any of your enrolled dependents age 13 and older use . Within households, we defined health insurance units (HIUs) which include an individual, their spouse if they are married, and all dependent children of either the reference individual or their spouse. Tobacco Users Pay Health Insurance Surcharges as per State and Federal Rules, Complete Overview on Buying Private Health Insurance Plan, Significant Differences between Public and Private Health Insurance Plan, Master the Tips to Shop for Health Insurance, Get personalized help related to Insurance Products, Service & Claims, Tips to Choose between Obamacare and Employer-sponsored Health Plans, Enrollment in Individual Health Plan is still possible after Ending of COVID SEP in the Most States, Free Health Insurance for Uninsured Americans with Stimulus Package. State tobacco surcharge policy may have a substantial impact on whether tobacco users choose to remain insured and consequently their ability to receive care critical for preventing and treating tobacco-related disease. Last updated January 6, 2022 Thus, it can be said that employers can charge higher premiums from employees using tobacco but they also have to offer a tobacco cessation program, so that employees have the option to avoid the surcharge by participating in the tobacco cessation program. States Vary on Higher Premiums Paid by Tobacco Users Under the ACA Kansas insurers applying up to 44 percent surcharge for tobacco users in 2015 11 Min Read Sep 09, 2015 By Linda J. Sheppard, J.D. Employees at several companies are pushing back on employer wellness programs that require higher health insurance premiums for tobacco users. Tobacco users will pay a surcharge for their health plan coverage beginning July 1, 2022. but it is unknown whether there are differential effects for smokers or those living in high surcharge states. 16. marketing partners; and (ii) [InsureMeNow] and marketing partners may contact you with It was increased from 18 to 21 in 1911. and state law. 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. Although third parties helped administer the tobacco cessation program for Macys, Macys had ultimate control of the wellness program, including: Because of these alleged violations, the DOL is asking the court for the following relief (in relation to the wellness program violations): Also in November 2021, a federal district court in Missouri certified a class action of 1500 casino workers who alleged, similar to the Macys case, that their employer violated ERISA with its tobacco surcharge. Alaska increased its tobacco age restriction from 16 to 19 in 1988. If dependents (such as spouses and/or dependent children) may participate in the wellness program, the reward must not exceed 30 percent (or 50 percent) of the cost of the coverage in which an employee and any dependents are enrolled. Macys offered a tobacco cessation program to employees, but the only way to avoid the surcharge was for the employee to declare that all covered members in his or her family remained tobacco free for a period of six consecutive months during the health plan year. Tobacco surcharges on 2015 health insurance plans sold in federally facilitated marketplaces: variations by age and geography and implications for health equity, Marketplace premiums rise faster for tobacco users because of subsidy design, Putting policy theory to work: tobacco control in California, Most exchange plans charge lower tobacco surcharges than allowed, but many tobacco users lack affordable coverage, Health insurance surcharges for tobacco use declined among small employers in 2018: an analysis of trends in small employer tobacco surcharges and cessation programs, Nearly half of small employers using tobacco surcharges do not provide tobacco cessation wellness programs, Evidence suggests that the ACAs tobacco surcharges reduced insurance takeup and did not increase smoking cessation. One key difference is that tobacco users in small group plans can avoid paying the surcharge by enrolling in a tobacco cessation program. The plaintiffs are seeking a refund of all the tobacco surcharges collected by the employer since 2016. New Jersey law states: A PERSON WHO SELLS OR OFFERS A TOBACCO PRODUCT TO A PERSON UNDER 21 YEARS OF AGE SHALL PAY A PENALTY OF UP TO $1,000 AND MAY BE SUBJECT TO A LICENSE SUSPENSION OR REVOCATION. The https:// ensures that you are connecting to the An employee must be able to avoid the surcharge by completing the alternative, even if the employee fails to quit smoking. Box 200130 Helena, MT 59620-0130 , While surcharges unambiguously lead to higher premiums for tobacco users in nongroup markets and thus ought to lead to lower enrollment, theoretically, surcharges could lead to either higher or lower enrollment in employer coverage. Tobacco use is the largest cause of preventable illness in the United States. Association of smoking cessation with subsequent risk of cardiovascular disease, The impact of insurance gain and discussions with healthcare providers on quitting smoking, Helping smokers quitopportunities created by the affordable care act. Data collection: 2. However, the Centers for Medicare and Medicaid Services has issued a subsequent rule that defines tobacco use as the use of any tobacco product within the last six months with a frequency of at least four times per week. Comparison of demographic characteristics by primary insurance type for nonelderly adults. The sample is limited only to states that allowed a tobacco surcharge and participated in the federal exchange. 8 Marketing materials may be provided via What is the amount of the tobacco surcharge? Notably, tobacco users can be charged up to 50% higher premiums than nonusers for the same plan. Conclusions: The University of Southern California Institutional Review Board approved the survey data collection and deemed the analysis of data from the CPS as exempt from full review, and the relevant part of the survey questionnaire is included in Appendix S2. Table TableA2:A2: AppendixS1 presents results from these regressions separately for the 2015 and 2019 samples. 8600 Rockville Pike Additionally, tobacco users in a small business may be able to avoid the penalty by participating in a tobacco cessation program through . 27 Unable to load your collection due to an error, Unable to load your delegates due to an error, Reasons for not enrolling in marketplace coverage. It is worth noting that the relative risk ratio for the interaction term was marginally significant for employer sponsored health insurance. Will the premium surcharges be split and collected from each paycheck? to not pay the monthly surcharge) for 2023. Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P = .01). According to our estimates, the presence of a tobacco surcharge decreased the likelihood of enrollment in a nongroup plan by 9.0 percentage points (P<.01) among smokers without insurance through an employer or public program. Finally, in several specifications we excluded families with incomes less than 138% of the federal poverty level for the following two reasons. If the program uses a medical test to detect nicotine or tobacco use, it also must comply with the ADA's rules for voluntary wellness plans. Allowing higher premiums for tobacco use in the nongroup market results in lower health insurance enrollment among smokers, which is driven by decreased enrollment in the nongroup market. However, the employers imposing a tobacco surcharge are also supposed to offer a tobacco cessation program. Under a law signed by Gov. 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