The tobacco age restriction across the country is 21 as a matter of federal law. , Section 1302 (c) (1) limits out-of-pocket costs and, for small group market plans, section 1302 (c) (2) limits deductibles. [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. Second, we separately estimated the effect of both the existence and the size of the tobacco surcharge, that is, whether allowing a tobacco surcharge influences insurance enrollment, and how the size of the surcharge implemented by insurers effects enrollment. 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. State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment. The health law also makes clear that financial help. 1865 into law. 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. States that did not sign legislation had their age restriction raised to 21 by federal law in December 2019. 83 votes, 182 comments. 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. Under a law signed by Gov. External Relations: Moira Delaney Hannah Nelson Caroline Presnell Research: Josh Altic You may switch to Article in classic view. 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. This option wouldn't change the amount of the federal premium tax credit, a move foreclosed by federal law. The state Legislature included the surcharge requirement in the state budget signed into law on June 30, 2013. After calculating AGI, we excluded adults over 65 since they would likely be covered by Medicare. 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. 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. The ACA's individual mandate in retrospect: what did it do, and where do we go from here? Participants overwhelmingly reported that cost of health insurance was a major reason for either not visiting their state's health insurance marketplace website or not purchasing a plan. Like the Macys case, this case is still pending. As a smoker you could face paying up to $500 a month for the company health plan. The prevalence of tobacco surcharge among small employers has significantly dropped mainly because the Department of Labor has become strict in enforcing provisions according to which tobacco cessation programs should be offered in conjunction with tobacco surcharges. The functionality is limited to basic scrolling. These people are also less likely to receive timely medical treatment at the time when they will need it. 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. 41% of respondents said this was the main reason they did not enroll, and 54% said it played a factor in their decision. See details about the 5-factor test in my previous blog post, What Is a Tobacco Surcharge and How Does My Company Offer One? 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. Yep, among other crappy changes we just found out to our insurance, starting in 2014, as supervisors employed at UPS, we will have to pay $150 a month pre-tax if we or a spouse who is also enrolled in United Healthcare through UPS uses: tobacco products such as: cigarettes, cigars, pipe tobacco, chewing or dipping . Los Angeles Joint Acknowledgment/Disclosure Statement: This study was funded by a grant from the American Cancer Society (RSGI1723401CPHPS). [12] Under a law signed by Gov. The inclusion of state fixed effects holds constant any state specific factors that might affect differential insurance enrollment choices between smokers and nonsmokers. [2] After June 2015, eighteen other states raised their tobacco age restriction to 21. A new study by researchers at the Yale School of Public Health reveals an unexpected consequence of the Affordable Care Act's (ACA) tobacco surcharges: High surcharges resulted in lower rates of insurance enrollment among smokers in the first year of the ACA's implementation, without increasing smoking cessation. Pesko MF, Maclean JC, Kaplan CM, Hill SC. Conclusions: There is an accommodation made for those it is unreasonably difficult to quit due to medical reasons. 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. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Though insurance companies no longer base health insurance premium depending upon applicants medical history and they are not even allowed to reject an application based on their pre-existing conditions or based on their health history, but ACA allows health insurance companies to base premiums depending on factors like age, family size, geographic location, as well as tobacco use. State agency staff should ensure employees are aware of the tobacco cessation programs available to them. USA, 2 7 The survey included tobacco users age 1864 with incomes above 138% FPL who reported being uninsured or insured through a marketplace plan. Policy: Christopher Nelson Caitlin Styrsky Molly Byrne Katharine Frey Jimmy McAllister Samuel Postell Liber AC, Hockenberry JM, Gaydos LM, Lipscomb J. 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. , Overall, this study found that tobacco surcharges led to significantly lower enrollment in nongroup health insurance among smokers. 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. 2 A number of states have passed laws prohibiting the rate increase for tobacco users or allowing a rate increase of less than 50%. Over 150000 emails were sent out to individuals who resided in the United States and were thought to be under 76years old. affordable care act, enrollment, health insurance, marketplace, premiums, smoking, tobacco surcharge, Reasons for not enrolling in marketplace coverage. Box 200130 Helena, MT 59620-0130 [13] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. Approximately every four years, the CPS includes a Tobacco Use Supplement (CPSTUS), which asks questions about smoking and tobacco use. Smoking cessation programs that include tobacco surcharges need to comply with federal rules for workplace wellness programs. Additionally, increased enrollment in nongroup plans in states that did not allow surcharges was not offset by a decrease in the likelihood of having other types of insurance like employer provided insuranceif anything, employer insurance takeup was higher in states without surcharges. 17 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%. Some states have set more restrictive limits on rating for tobacco use, and several states have outlawed tobacco premium surcharges altogether. Youth access to tobacco law-RCW 70.155: Prohibits the sale and distribution of tobacco products to minors. While these rules may be frustrating to employers, ignoring them is not worth a lawsuit by the DOL. to not pay the monthly surcharge) for 2023. Tobacco surcharges and the state laws that limit them theoretically have varying effects on different segments of the health insurance market. 2020 Dec; 55(6): 983992. Mokdad AH, Marks JS, Stroup DF, Gerberding JL. 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. , The $25 surcharge (per person, per pay) applies to employees and spouses covered under the Einstein health plan. FPL=Federal Poverty Level. The results from the linear probability models are shown in Table2. Jun 28, 2013. 5 I'm at work right now, but here is a quick rundown of what we have going on here. 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). 19 9 26 Premium rating rules for nongroup insurance and small group plans (generally plans provided by employers with fewer than 50 employees) are similar. As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. 7 Americans Make Use of your Health Coverage Even while Being Healthy. 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. We linked data from two components of the Current Population Surveythe 2015 and 2019 Annual Social and Economic Supplement and the Tobacco Use Supplement, which we combined with data on marketplace plan premiums. 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; We found that among individuals without insurance through an employer or public program, living in a surcharge state decreased the probability that a smoker enrolled in a nongroup plan by 0.9.0 percentage points (P<.01). For purposes of the premium surcharge, "tobacco use" is defined as: . 3 Michael F. Pesko, Georgia State University. already built in. Tobacco users can . In the 37 states that use the federal insurance exchange, HealthCare.gov, the tobacco surcharge was paid by about 7 percent of 5.1 million consumers who enrolled, according to federal data. 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. Benefits Insight. Over the last few years, adult tobacco use in the state has steadily declined. Eight states increased their restrictions under a Democratic trifecta, four increased their restrictions under a Republican trifecta, and seven increased their restrictions under divided government. Because tobacco surcharges are changing over time, this specification also allowed us to include state fixed effects. Respondents also listed tobacco surcharges as a major factor. Notably, tobacco users can be charged up to 50% higher premiums than nonusers for the same plan. Income eligibility for assistance under the affordable care act: technical memorandum on estimates for nonelderly adults. and nonsmokers who use tobacco may be less likely to consider themselves to be regular tobacco users. 20 Employers that are ALEs (i.e., have 50 or more full-time equivalent employees . 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. Column 1 shows the effect of tobacco surcharges on the differences in insurance rates between smokers and nonsmokers for the full sample of nonelderly adults. 2 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 . PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. The lawsuits also teach us that wellness programs must not only offer a reasonable alternative standard but must make sure that anyone who completes that reasonable alternative standard qualifies for the entire reward for that plan year. During plan year 2013, Macys included a notice within the Tobacco Affidavit alerting the employee to the availability of a reasonable alternative standard, so it satisfied the notice requirement. 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. 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. John Lehman. Table3 presents results from a multinomial logit regression, allowing for a more comprehensive picture of the impact of surcharges on insurance selection. She is also lead author of the book, Rule the Rules on Workplace Wellness Programs, published by the American Bar Association. 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). Our insurance expert will call you soon. 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. Instead, the notice materials stated employees would only avoid the tobacco surcharge on a prospective basis. This surcharge is considered a tax-sheltered amount for payroll. The health insurance premiums are low for people under the age of 21, and there is a cap of three times the rates that apply to a 21-year old. 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. , 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. Additionally, tobacco users in a small business may be able to avoid the penalty by participating in a tobacco cessation program through . All models used CPSASEC weights, and standard errors are clustered at the state level. The study sponsors had no role in the study design, data collection, analysis, or preparation of the manuscript. 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. Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. 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 . Specifically, our model compares the insurance status of smokers to nonsmokers across states with and without tobacco surcharges. !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r