Despite ACA lawmakers strong feeling that an individuals health condition should not be taken into consideration when setting the health insurance premiums, still they allowed health insurers to charge higher premiums from the tobacco users. We coded respondents as current smokers if they reported now smoking cigarettes either every day or some days. This definition is slightly different from the definition used to apply the tobacco surcharge, which is the use of tobacco products four or more times, on average, per week within the past six months. We used the narrower definition, considering only cigarette smokers because cigarette smokers make up most of the population of every day tobacco users Standard errors, clustered at the state level are shown in parentheses. Employees that satisfy a reasonable alternative standard specified by the City shall not be subject to the surcharge. 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. Plans in both market segments are allowed to charge enrollees different rates based on the same four factors. 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. 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 Tobacco use is the largest cause of preventable illness in the United States. 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. The California Complementary Legislation (or "directory law"), Revenue and Taxation Code section 30165.1, requires the Attorney General to publish a directory of tobacco product manufacturers and brand families of cigarettes and roll-your-own tobacco that are lawful for sale in California. The American Lung Association calls for the following actions to be taken by Idaho's elected officials to reduce tobacco use and exposure to secondhand smoke: Treat electronic nicotine delivery devices consistent with traditional tobacco products in all areas under state law; 7 tobacco surcharge rules by state. However, our models adjusted for other state policies that may affect insurance enrollment and tobacco use. 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. Since 2014 the Affordable Care Act has permitted employers and insurance companies to charge tobacco users up to 50% more in premiums. Because tobacco surcharges are changing over time, this specification also allowed us to include state fixed effects. 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). In states that allow tobacco surcharges, tobacco users pay substantially higher premiums for nongroup health insurance than nonusers. The survey included tobacco users age 1864 with incomes above 138% FPL who reported being uninsured or insured through a marketplace plan. See details about the 5-factor test in my previous blog post, What Is a Tobacco Surcharge and How Does My Company Offer One? 3 Conclusions: States, however, can set their own rules to reduce or eliminate that surcharge and so far at least 10 have done so, including most notably California, where the permissible surcharge has been cut to to zero. Now is a good time to review whether your wellness program is compliant with ERISA and other wellness program laws, including HIPAA, ADA, and GINA. 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. Notably, our point estimates are in line with those reported by Friedman et al The employer determined tobacco use status through an affidavit completed by each employee covered under the employer group health plan. This is due to a "tobacco surcharge". Health Aff (Millwood). sharing sensitive information, make sure youre on a federal In order to assess the impact of state policy on enrollment, we used a differenceindifference specification, comparing enrollment among smokers and nonsmokers in states that did and did not allow tobacco surcharges. 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. Gary Herbert (R) in March 2019, Utah's tobacco age restriction was set to increase from 19 to 20 on July 1, 2020, and to 21 on July 1, 2021. Our main source of data was the Current Population Survey (CPS). Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. We measured individual and household characteristics to be used as covariates in our regression models from CPSASEC. The tobacco cessation wellness program is designed to promote health and prevent disease. However, the employers imposing a tobacco surcharge are also supposed to offer a tobacco cessation program. 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. Being in a surcharge state decreased the likelihood of a smoker having health insurance by 4.0 percentage points (P=.02). Please email us if you would like to suggest a revision. Tobacco surcharge may also be incorporated in the employer-sponsored health plans that can increase the standard premium by up to 50% unless a state has implemented a lower tobacco surcharge. Our results are robust to these alternative specifications. You may notice problems with and transmitted securely. 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. Marketplace Premiums Rise Faster For Tobacco Users Because Of Subsidy Design. 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. Columns 3, 4, and 5 show results limiting the sample to individuals with incomes above 138% FPL, which includes those who have incomes too high to qualify for Medicaid under the expansions, but who are eligible for subsidies in the marketplaces and are thus more likely to be affected by tobacco surcharges. 7 [12] Under a law signed by Gov. Table TableA3:A3: AppendixS1 presents results excluding individuals under 26 and classifying tobacco use as the use of any tobacco product rather than cigarettes only. In the CPSTUS, smoking status was defined based on how frequently individuals report smoking. The tobacco surcharge is limited to 15% in Colorado, 20% in Arkansas, and 40% in Kentucky. Research: Josh Altic The results indicate that smokers were at an decreased risk of being in a nongroup plan or an employer plan relative to being uninsured. , September 29, 2021. What is a tobacco surcharge? Under the health reform law, private insurers can charge tobacco users no more than 50% more per month than who do not use tobacco. Setting up a tobacco surcharge may seem straight forward but for it to be effective, you need to be strategic. We found that living in a surcharge state decreased the probability of enrolling in a nongroup plan by 13.3 percentage points (P<.01) among these individuals who are most likely to benefit from the marketplacesthose with incomes over 138% FPL who do not have insurance through their employer or a public program. 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. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. This Ballotpedia article is in need of updates. **Please Note: Nothing contained in this blog post is to be construed as legal advice. 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. As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. The tobacco surcharge only applies to UAB employees. During the 1920s and 1930s, state laws trended towards a limit of 18 years. but it is unknown whether there are differential effects for smokers or those living in high surcharge states. Our insurance expert will call you soon. The inclusion of state fixed effects holds constant any state specific factors that might affect differential insurance enrollment choices between smokers and nonsmokers. It is currently unclear what amount of incentive is permissible under these ADA rules. Joint Acknowledgment/Disclosure Statement: This study was funded by a grant from the American Cancer Society (RSGI1723401CPHPS). 13 The challenges and successes of each state's fight against tobacco use, and tobacco prevention efforts. 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