[11] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. CA, Study design: 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. 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. Providing adequate notice about the reasonable alternative standard is also mandatory. 1865 into law. 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. 3 Marketplace Premiums Rise Faster For Tobacco Users Because Of Subsidy Design. Standard errors, clustered at the state level are shown in parentheses. Among states that allowed a tobacco surcharge, we also examined the effect of the surcharge size on enrollment, again comparing smokers to nonsmokers. These people are also less likely to receive timely medical treatment at the time when they will need it. 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. 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. affordable care act, enrollment, health insurance, marketplace, premiums, smoking, tobacco surcharge, Reasons for not enrolling in marketplace coverage. Instead, the notice materials stated employees would only avoid the tobacco surcharge on a prospective basis. Mokdad AH, Marks JS, Stroup DF, Gerberding JL. Because the State Plan program does not use medical tests to detect nicotine usage, the amount of the tobacco surcharge can be as much as 50% of the total cost of employee-only health coverage. The most common options include (i) HSA, HRA or FSA contributions; (ii) a decrease in employee contributions toward medical coverage (often referred to as a tobacco surcharge); and (iii) cash, gift cards or entries into a prize drawing. While in most states a tobacco surcharge is permitted, the rules have become quite complex. This surcharge is considered a tax-sheltered amount for payroll. 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. Section 1302 (c) (1) limits out-of-pocket costs and, for small group market plans, section 1302 (c) (2) limits deductibles. , 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. 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. 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. 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. Additionally, among those facing a tobacco surcharge, a 10 percentage point increase in the size of the tobacco surcharge decreased the likelihood of enrollment in nongroup insurance by 8.6 percentage points (P=.02). CA, State by State Tobacco Laws, Taxes, and Statistics. 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. Visit www.nysmokefree.com, for information, to chat online with a Quit Coach, or to sign up for Learn2QuitNY, a six-week, step-by-step text messaging program to build the skills you need to quit any tobacco product. This paper contributes to a small existing literature on the impact of tobacco surcharge laws on health insurance enrollment. Thursday, Feb 7 2013 Assembly Bill Would Block ACA Tobacco Surcharge Last week, Assembly member Richard Pan (D-Sacramento) introduced a bill ( AB 1X2) that would block an Affordable Care Act provision that allows insurers to charge smokers with an individual policy up to 50% more in premiums from being implemented in California. John Lehman. 2020;55:983992. Albeit, the use of tobacco for religious or ceremonial purposes are excluded from the rule. Instead, the employer gave employees only two options: 1) dont use tobacco and avoid the surcharge; or. Company employs a couple thousand in the US 64C increased to $3.51 per pack. 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. . 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. 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. 11 The survey included tobacco users age 1864 with incomes above 138% FPL who reported being uninsured or insured through a marketplace plan. Accessibility The Affordable Care Act brought dramatic changes to the individual and small group health insurance premiums still, the use of tobacco by a person can affect the price one pays for the health coverage. there is yet little evidence that insurance surcharges lead to changes in tobacco use. In addition, 14 percent used . Tobacco use is the largest cause of preventable illness in the United States. Table1 compares sample characteristics across insurance type. The Office on Smoking and Health conducts and supports national and international surveys on tobacco use, smoking cessation, secondhand smoke exposure, and other tobacco-related topics among youth, adults and specific populations. The state Legislature included the surcharge requirement in the state budget signed into law on June 30, 2013. State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment. USA. affordable care act; enrollment; health insurance; marketplace; premiums; smoking; tobacco surcharge. Public insurance includes Medicare, Medicaid, VA, CHAMPUS, Tricare, and Indian Health Service. 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. The health law also makes clear that financial help. 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. 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. 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. Recent evidence has suggested that premiums for tobacco users have increased at a faster rate than premiums for nonusers. The survey included tobacco users age 1864 with incomes above 138% FPL who reported being uninsured or insured through a marketplace plan. September 29, 2021. The plaintiffs are seeking a refund of all the tobacco surcharges collected by the employer since 2016. Barbara J. Zabawa is the founder and president of the Center for Health and Wellness Law, LLC, a law firm dedicated to improving legal access and compliance for the health and wellness industries. You also agree that: (i) [InsureMeNow] may share your personal information with its third-party In addition to the coefficients shown, all regressions control for sex, age, age squared, race, family size, education, log family income, selfreported health status, state Medicaid expansion status, state cigarette taxes, clean indoor air laws, and year (2015 vs 2019). Benefits Insight. Careers. , By 1920, 46 states had implemented an age limit for tobacco sales, of which 14 set the limit at 21. Most exchange plans charge lower tobacco surcharges than allowed, but many tobacco users lack affordable coverage. Directing the third parties regarding how completions of the tobacco cessation programs were reported. First, there is known overreporting of nongroup health insurance plan participation among Medicaid eligible respondents in survey data including the CPS. 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. Tobacco use is the largest cause of preventable illness in the United States. We limited the sample to individuals in states with tobacco surcharges, comparing the impact of the size of the average tobacco surcharge on differences in insurance coverage between smokers and nonsmokers. Thus, the actual monthly premium paid by the tobacco users will depend upon the health insurance company they choose and the area in which they are living. Tobacco Use People who use tobacco can be charged up to 50% more than the people who dont use tobacco. Duncan MS, Freiberg MS, Greevy RA, Kundu S, Vasan RS, Tindle HA. 8 The employer determined tobacco use status through an affidavit completed by each employee covered under the employer group health plan. In August 2017, the United States Department of Labor (DOL), which enforces compliance with ERISA, sued Macys, Inc. as well as its third-party administrators for its self-insured health plan: Anthem Blue Cross Life and Health Insurance Company and Cigna. Colorado limits the tobacco surcharge to 15%. [9][10] The tobacco age restriction remained at 19 until federal law raised it to 21 in December 2019. 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). You will be charged a $25 tobacco use premium surcharge in addition to your monthly medical plan premium if you or any dependent (age 13 and older) who is enrolled on your SEBB medical coverage uses a tobacco product. 7 PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. The surcharge is an extra charge on your health plan if you're a tobacco user or for those who don't partake, they may receive a discount. Jun 28, 2013. External Relations: Moira Delaney Hannah Nelson Caroline Presnell Our approach differs from the tripledifference approach used by Friedman et al, which used pre and postACA implementation as a third difference. , We used linear probability models with a differenceindifference specification. 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. 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. All regressions are weighted using the appropriate weights from the Current Population Survey. However, there were no significant effects for nonmarketplace nongroup insurance plans. It is vital to note individuals cannot use their premium subsidies to cover the tobacco surcharge that is generally used by the majority of the enrollees to reduce their monthly premiums. The outcome variable represents four categories of insurance typeuninsured (omitted), nongroup, employer, and public. Los Angeles These data were only available for the 38 states that participated in the federal exchange. The https:// ensures that you are connecting to the It has been more than a century since Utah's tobacco age restriction was last 18. More research is needed to test whether tobacco surcharges decrease premiums for nonusers. Albeit if a person with an average premium is subjected to a 50% tobacco surcharge, then their monthly premium would increase to $864 per month, and their premium subsidy would not change. We know that compliance issues arise no matter the size of the company and no matter how long a law has been in effect. 18. Other important reasons for not enrolling included not knowing about the marketplaces and/or not knowing how to enroll (19% main reason, 29% a factor), believing they were not eligible (8% main reason, 16% a factor), coverage not meeting needs including provider networks or benefits (3% main reason, 14% a factor), not needing health insurance (8% main reason, 11% a factor), or missing the enrollment period (4% main reason, 8% a factor). 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. In order to examine health insurance enrollment by tobacco use, we linked data from both CPSASEC and CPSTUS. 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. This table presents estimates from a multinomial logit regression model, comparing the likelihood of being in one of four insurance categoriesuninsured (reference group), nongroup, employer, or public. [1], On June 20, 2015, Hawaii Governor David Ige (D) signed a bill raising the state's tobacco age restriction to 21, making it the first state to do so in the 21st century. We found that the tobacco surcharge rate averaged approximately 14 percent and that it was associated with lower total enrollment as well as a reduced share of total enrollees who reported any tobacco use. Results showing the impact of the size of tobacco surcharges are presented in Table4. All plans offered on the marketplace adhere to the ACA tobacco surcharge restrictions; however, more than half of nongroup plans offered outside of the marketplaces are not ACA compliant. The 2019 ASEC included variables that specifically identify marketplace coverage, so we examined whether the effect is driven by those with marketplace plans using the 2019 data only. 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. 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. 2023 All rights reserved to InsureMeNow | Terms & Conditions | Privacy Policy. Employees should also be aware they are required to certify tobacco use for themselves and their dependents. Standard errors, clustered at the state level are shown in parentheses. Due to the sampling design of CPS, all households from CPSASEC can theoretically be linked to the CPSTUS in either January or May of 2015 or 2019. Plan members who are tobacco users can avoid . Department of Economics, We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. 17117 individuals opened the survey, and 1034 qualified for and completed the survey. 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. Thank you. By 1920, 46 states had implemented an age limit for tobacco sales, of which 14 set the limit at 21. but it is unknown whether there are differential effects for smokers or those living in high surcharge states. Our results are robust to these alternative specifications. 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. This allows us to account for whether the effect is concentrated in the nongroup market or whether there are spillover effects. 54:40A-4.1 7 Tobacco surcharge has also been prohibited in Connecticut but only for plans that are sold through the states health insurance exchange. 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 also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. , 41. For purposes of the premium surcharge, "tobacco use" is defined as: . It is worth noting that the relative risk ratio for the interaction term was marginally significant for employer sponsored health insurance. HOME; STATE BY STATE; NEWS ARCHIVE. 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.