Marketing materials may be provided via Compared to those with insurance, uninsured individuals tended to be younger, have smaller family sizes, lower levels of family income and education, and they are more likely to be male and nonwhite. Impact of allowing a state surcharge on enrollment in a health insurance planresults from differenceindifference linear probability model, Relative risk ratios from multinomial logit regression on type of health insurance plan. Alaska increased its tobacco age restriction from 16 to 19 in 1988. Albeit, the use of tobacco for religious or ceremonial purposes are excluded from the rule. In other words, a vaccine-related surcharge will have the effect of making coverage less affordable by ACA standards. Over the last few years, adult tobacco use in the state has steadily declined. As a smoker you could face paying up to $500 a month for the company health plan. Smokers living in states with high tobacco surcharges are less likely to have health insurance. First, we used data that link detailed health insurance information including plan type with tobacco use data, which allowed us to examine the impact of tobacco surcharges on enrollment decisions for each market segment, rather than just the likelihood of being insured in any health insurance plan. Standard errors, clustered at the state level are shown in parentheses. We also excluded children under 19 who did not participate in the CPSTUS and who qualify for Medicaid/CHIP at higher income thresholds than adults. First, each March, participants respond to the Annual Social and Economic Supplement (CPSASEC), which includes detailed questions about the source and type of health insurance coverage as well as exhaustive income and employment questions. Premium rating rules for nongroup insurance and small group plans (generally plans provided by employers with fewer than 50 employees) are similar. Best steps for trap avoidance: offer a reasonable alternative and notify employees of its availability. 22 Plan members need to attest to their tobacco status in their Virgin Pulse portal by May 31, 2022. New York and Vermont are the two states where health insurance premiums are not based on age. The Potential and peril of health insurance tobacco surcharge programs: evidence from Georgias state employees health benefit plan, https://www.kff.org/other/stateindicator/individualmarketraterestrictionsnotapplicabletohipaaeligibleindividuals/, https://www.cms.gov/files/document/4120healthinsuranceexchanges2020openenrollmentreportfinal.pdf. 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. While in most states a tobacco surcharge is permitted, the rules have become quite complex. 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. State agency staff must ensure the tobacco user premium differential is deducted from employees' net pay when applicable. All State Health Plan members (employee only) must complete the tobacco attestation in order to eliminate the default surcharge of $60 a month for 2023. . Second, due to Medicaid expansions, eligibility for marketplace subsidies and Medicaid overlaps between 100% and 138% FPL in some states, but not others. Individuals are able to report multiple sources of health insurance in CPSASEC. Setting up a tobacco surcharge may seem straight forward but for it to be effective, you need to be strategic. Low and modest-income people buying health insurance may qualify for premium subsidies that cover the majority or even all of their health insurance premiums. Compliance Overview: Tobacco Surcharges Legal Rules April 30, 2019 By Lesa M. Votovich As employers continue to show more interest in adding wellness programs to their employee benefit plans, they must also be cognizant of any federal and/or state laws that could impact the components of these programs.

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Income eligibility for assistance under the affordable care act: technical memorandum on estimates for nonelderly adults.

We linked data from two components of the Current Population Survey-the 2015 and 2019 Annual Social and Economic Supplement and the Tobacco Use Supplement, which we combined with data on marketplace plan premiums. However, our models adjusted for other state policies that may affect insurance enrollment and tobacco use. Liber AC, Hockenberry JM, Gaydos LM, Lipscomb J. In order to examine health insurance enrollment by tobacco use, we linked data from both CPSASEC and CPSTUS. 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.

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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. 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. 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. 2023 All rights reserved to InsureMeNow | Terms & Conditions | Privacy Policy. 41% of respondents said this was the main reason they did not enroll, and 54% said it played a factor in their decision. 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. Additionally, tobacco users in a small business may be able to avoid the penalty by participating in a tobacco cessation program through . 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. This tax applies to cigars, snuff, chewing tobacco, and any other tobacco product except for cigarettes. 26 She is also lead author of the book, Rule the Rules on Workplace Wellness Programs, published by the American Bar Association. to pay the costs the government incurred to bring the lawsuit against Macys. The cigar and smoking tobacco excise imposed by M.G.L. Theoretically, tobacco surcharges could lead to lower premiums for nonusers, which could potentially lead to higher enrollment among that group. , Employees hired on or after January 1, 2019 who participate in the City 's medical insurance program and use tobacco will be charged a twenty-five dollar ($25.00) per month surcharge. Our main source of data was the Current Population Survey (CPS). Federal government websites often end in .gov or .mil. As of July 1, 2013, the excise tax imposed on cigarettes under M.G.L. The interaction terms between surcharge state and current smoker show the key differenceindifference results. 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.

, if(document.getElementsByClassName("reference").length==0) if(document.getElementById('Footnotes')!==null) document.getElementById('Footnotes').parentNode.style.display = 'none'; Communications: Alison Graves Carley Allensworth Abigail Campbell Sarah Groat Lauren Nemerovski Caitlin Vanden Boom 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 wileyonlinelibrary.com], State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment, GUID:57024003-B728-4156-B6F8-1C7CF1E128C4, GUID:8B1E074E-83F9-4927-82C1-164DFCE3D0D8, GUID:B324CE6B-5446-4427-8631-2DF7A4EC06A9. , However, the interaction term between nonsurcharge state and current smoker was only statistically significant at P<.05 for nongroup insurance, which gives us confidence in the specifications presented in Table2 that excluded individuals with insurance through an employer or public program. Tobacco users will pay a surcharge for their health plan coverage beginning July 1, 2022. This allows employees to avoid the surcharge by participating in the cessation program. Theoretically, surcharges could also lead to reduction in smoking by imposing a financial penalty for the behavior. It is worth noting that the relative risk ratio for the interaction term was marginally significant for employer sponsored health insurance. affordable care act; enrollment; health insurance; marketplace; premiums; smoking; tobacco surcharge. The first law in the United States regulating the sale of tobacco by age was passed in New Jersey in 1883 and set a minimum age of 16. Conditional on allowing a surcharge, higher surcharges result in lower enrollment among smokers in both any insurance plan and in nongroup insurance plans in particular. 25 Employees should also be aware they are required to certify tobacco use for themselves and their dependents.

Most of the participants in the recent DOL lawsuits who did not confirm they had quit smoking that is, were tobacco free for some duration, such as six months, had to pay surcharges. To learn more: Call 1-866-NY-QUITS (1-866-697-8487) toll free; Text (716) 309-4688; or. Public insurance includes Medicare, Medicaid, VA, CHAMPUS, Tricare, and Indian Health Service. 24 In November 2021, the Ohio District Court ruled that the DOLs case can move forward with the alleged tobacco surcharge violations for plan years 2011-2013. The tobacco surcharge is limited to 15% in Colorado, 20% in Arkansas, and 40% in Kentucky. 5 3 Michael F. Pesko, Georgia State University. Although evidence suggests that tobacco taxes and other policies that increase the cost of smoking have a direct impact on smoking, By limiting the sample respondents in states with tobacco surcharges, we were able to estimate the effect of the size of the surcharge on insurance enrollment. 1 to not pay the monthly surcharge) for 2023. 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 inclusion of state fixed effects holds constant any state specific factors that might affect differential insurance enrollment choices between smokers and nonsmokers. Results showing the impact of the size of tobacco surcharges are presented in Table4. See this image and copyright information in PMC. This Ballotpedia article is in need of updates. This table presents estimates from a differenceindifference linear probability model, examining the likelihood of the outcome of interest for smokers in surcharge states. 2016 Jul 1;35(7):1176-83. doi: 10.1377/hlthaff.2015.1540. Members Currently Paying the Tobacco Surcharge: If a member is currently paying the tobacco surcharge and does not make an active election during Open Enrollment, the current enrollment will default to the new Plan Year and the member will continue to pay the tobacco surcharge. At incomes over 138% FPL, insurance eligibility is substantively similar across states. 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. prevent or reduce tobacco use) of the cost of employee-only coverage under the plan. The table presents relative risk ratios from a differenceindifference specification similar to the one presented in Table2 and including all income levels. 4. In other words, according to the plaintiffs, the employer did not give them a reasonable alternative standard, like a tobacco cessation program, to avoid the $50/month surcharge. Critics of surcharge policies point to data from other health-contingent premium programs showing that they fail to change individuals' behavior. For purposes of the premium surcharge, "tobacco use" is defined as: . Alternatively, a state may require that the tobacco use surcharge be calculated as a share of the consumer's subsidized premium (instead of from the unsubsidized price, as under the default rules).

Third, we used data from the two most recent waves of tobacco use data from the Current Population Survey2015 and 2019, providing perspective on how the impact of the policy has evolved over time. As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. Thank you. Tech: Matt Latourelle Nathan Bingham Ryan Burch Kirsten Corrao Travis Eden Tate Kamish Margaret Kearney Joseph Sanchez. Principal findings: 17 already built in. Additionally, the elimination of the individual mandate has led to a decrease in enrollment, Kaplan CM, Kaplan EK. 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. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. You also agree that: (i) [InsureMeNow] may share your personal information with its third-party As such, several previous studies have shown that gaining access to health insurance can have large effect on both quitting smoking and cancer screening. A few years back it was discovered by a Health Affairs analysis that more than 16% of the small employers were using tobacco surcharge, and about half of them were not offering a tobacco cessation program.

Notably, using data from the Behavioral Risk Factor Surveillance System, Freidman and colleagues found the probability of having insurance was reduced among smokers in states with high tobacco surcharges relative to states without surcharges. Column 1 shows the likelihood of having any insurance in our full sample; column 2 shows the likelihood of having nongroup insurance among a sample of individuals with either nongroup insurance or no insurance; columns 3 and 4 show the likelihood of having marketplace insurance among those reporting having nongroup insurance or being uninsured. Tobacco use is the largest cause of preventable illness in the United States. The state Legislature included the surcharge requirement in the state budget signed into law on June 30, 2013. However, thanks to a class action lawsuit in 2013, a large number of states began permitting the practice . The program may include a tobacco surcharge to help motivate employees. Column 3 repeats the specification from column 2 and confirms that the relationship is stronger among this population. to reimburse all participants who paid the tobacco surcharge from July 1, 2011, to the present (plus interest), to revise its wellness program to comply with ERISA wellness incentive rules, to prevent Macys from collecting tobacco surcharges until it revises tis wellness program to comply with the ERISA rules, to empty all profits received as a result of its fiduciary breaches, and. State agency staff should ensure employees are aware of the tobacco cessation programs available to them. 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. Tom Wolf (D) on November 27, 2019, Pennsylvania's tobacco age restriction was set to increase from 18 to 21 on July 1, 2020. If the program imposes a tobacco surcharge based on whether participants smoke (or otherwise use tobacco), participants who request an alternative standard must be offered a reasonable one,.

2020 Dec; 55(6): 983992. Smoking cessation programs that include tobacco surcharges need to comply with federal rules for workplace wellness programs.

There has been a flurry of activity lately involving employer wellness programs that impose a tobacco surcharge on health insurance. Help expand Ballotpedia's elections coverage - volunteer with us. This allows us to account for whether the effect is concentrated in the nongroup market or whether there are spillover effects. The Affordable Care Act allows insurers to charge up to 50% higher premiums to tobacco users, making tobacco use the only behavioral factor that can be used to rate premiums in the nongroup insurance market. All models used CPSASEC weights, and standard errors are clustered at the state level. In some of the circumstances, there may not be any surcharge for tobacco users. 11 To learn more, visit our Employers page, Determining which participants were charged the tobacco surcharge, Determining which participants were reimbursed the tobacco surcharge, Withholding the tobacco surcharge from a participants paycheck and placing it in the health plan trust account; and. Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. Federal government rules let employers charge smokers up to 50 percent of the cost of their health insurance benefits. Geographic Location The costs of health insurance premiums are not the same in every zip code, and vary from one area to another. Instead, the notice materials stated employees would only avoid the tobacco surcharge on a prospective basis.

We found that the likelihood of having insurance among smokers was 4.0 percentage points (P=.02) lower in surcharge states, while Friedman and coauthors found that enrollment was 4.3 percentage points lower in states with medium sized surcharges, compared to states without surcharges, although their estimate was not statistically significant. The federal law gives insurers the right to add up to 50 percent to the cost of individual health care coverage. Department of Economics,

8 We then took the mean of the median surcharge across all rating areas in the state weighted by the population of the rating area age 2064. Learn 4 tips for making your tobacco cessation program more successful. (ROC Cabinet OKs [] State of Montana Health Care & Benefits Division 100 North Park Ave ., Suite 320 P.O. All regressions are weighted using the appropriate weights from the Current Population Survey. Surveys. Finally, we gathered data on tobacco surcharges from the CMS Health Insurance Exchange Public Use Files for 2015 and 2019. This means that health insurers can charge individual and small group tobacco users up to 50% more than non-tobacco users.

but it is unknown whether there are differential effects for smokers or those living in high surcharge states. Descriptive statistics from linked CPSASEC and CPSTUS data pooled across 2015 and 2019. affordable care act, enrollment, health insurance, marketplace, premiums, smoking, tobacco surcharge, Reasons for not enrolling in marketplace coverage. A $50 monthly tobacco surcharge will be applied to employees who declare tobacco usage. University of Southern California, 3 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. Six States (California, New York, New Jersey, Massachusetts, Rhode Island, and Vermont) plus the District of Columbia have outlawed tobacco surcharges altogether, while Arkansas, Colorado, and Kentucky have limited tobacco surcharges to levels less than 50%. An employee must be able to avoid the surcharge by completing the alternative, even if the employee fails to quit smoking. If people avoid health insurance simply because they cant afford it, then they will also not able to access the coverage for the free tobacco cessation that is included with ACA-compliant health plans. Plans in both market segments are allowed to charge enrollees different rates based on the same four factors. Rate: 35% of the wholesale purchase price; Both cigarettes and other tobacco products are subject to the 4.5% state sales tax rate plus the general municipal sales tax rates when sold at retail. One important limitation of our study is that although we compare enrollment rates by smoking status, smoking status is not experimentally varied across groups. 7

Our estimates indicate that the probability that a smoker had insurance decreases by 3.4 percentage points (P<.01) relative to nonsmokers for a 10 percentage point increase in the size of the tobacco surcharge. 54:40A-4.1 September 29, 2021. and transmitted securely.

The Market Rules and Rate Review Final Rule (45 CFR Part 147) provides that each state will have age rating ratios of 3:1 using a federally established age curve, tobacco rating ratios of no more than 1.5:1 and per member rating unless a state requests ratios less than the standard, is a community rating state with uniform family tiers, or allows for averaging . 2 Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Smokers could find themselves burned by the Affordable Care Act. Youth access to tobacco law-RCW 70.155: Prohibits the sale and distribution of tobacco products to minors. Eliminating tobacco surcharges or substantially limiting them is an option that state policy makers may consider in order to increase health insurance coverage among this particularly vulnerable population. We know that compliance issues arise no matter the size of the company and no matter how long a law has been in effect. States that did not sign legislation had their age restriction raised to 21 by federal law in December 2019. Health Aff (Millwood). Last updated January 6, 2022 Under a law signed by Gov. Age The health insurance premiums are based on an individuals age, as older people are charged higher premiums compared to younger people. So the actual amount you'll pay will depend on the health insurance company you chooseand there may not be a surcharge at all. Evidence that tobacco surcharges lead to lower takeup of marketplace plans is further bolstered by results from a separate survey of tobacco users. Minors are prohibited from buying alternative nicotine products, including e-cigarettes.6 Establishments are required to post signs stating that sales to minors are prohibited.6 Local tobacco laws We used two important supplements to the CPS. and state law. 64C increased from 30% to 40% of the wholesale price of the products, and smokeless tobacco products increased from 90% to 210% of the wholesale price. Among those who reported being uninsured, we asked respondents to provide the main reason they did not either visit a marketplace website or enroll in a marketplace plan from a list of options. Joint Acknowledgment/Disclosure Statement: This study was funded by a grant from the American Cancer Society (RSGI1723401CPHPS).
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