tobacco surcharge rules by state

In a participatory wellness program, a participant earns incentives merely by participating in the program. 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. In those programs, incentives are tied to achieving a health status goal, such as not using tobacco or having a certain weight or blood pressure (outcomes-based). All tobacco users may have their tobacco surcharge removed by completing the wellness requirements outlined in Bethesda, MD 20894, Web Policies Allowing tobacco surcharges at all and having larger tobacco surcharges were each associated with lower takeup of insurance. HHS Vulnerability Disclosure, Help One key difference is that tobacco users in small group plans can avoid paying the surcharge by enrolling in a tobacco cessation program. We also collected qualitative data from a survey of smokers who did not have 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. 23 WebThe only medical question an insurance company asks that may affect your rates is your tobacco use. 22 County populations were pulled from the 2014 and 2018 American Community Survey annual county level estimates and aggregated up to the rating area level. Approximately every four years, the CPS includes a Tobacco Use Supplement (CPSTUS), which asks questions about smoking and tobacco use. Learn 4 tips for making your tobacco cessation program more successful. stop using tobacco or 5 The EEOC does not consider tobacco cessation programs that merely ask employees whether they use tobacco and whether they ceased using tobacco upon completion of the program to be making disability-related inquiries or medical examinations.. Since the ACA allows states to set their own policy regarding tobacco surcharges, it is one aspect of the ACA that may be more amenable to modification, especially during times when partisan divide in congress makes it difficult to amend federal regulations. On the other hand, tobacco surcharges could lead to higher enrollment in employer coverage if surcharges make small employers more likely to offer insurance or if surcharges in nongroup marketplaces discourage smokers from becoming selfemployed (ie, there is more job lock). Over 150000 emails were sent out to individuals who resided in the United States and were thought to be under 76years old. Within each HIU, we estimated the family income that would be used to determine eligibility for marketplace subsidies or Medicaid enrollment by summing the simulated adjusted gross income (AGI) variable from the CPS across all members of the HIU. 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. Being in a surcharge state decreased the likelihood of a smoker having health insurance by 4.0 percentage points (P=.02). Incentives (such as a premium differential) tied to not using tobacco is an outcomes-based wellness program. 11 WebTobacco cessation must be provided at no cost under most types of health insurance as of January 1, 2014. University of Southern California, Mokdad AH, Marks JS, Stroup DF, Gerberding JL. Accessibility The plaintiffs state that the law requires the full reward be available upon completion of the reasonable alternative standard, which means the plaintiffs would be entitled to a refund of the $50/month penalty that they had already paid during that plan year. Talk to our experts at the American Lung Association Lung HelpLine and Tobacco QuitLine. An official website of the United States government. 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). Our approach differs from the tripledifference approach used by Friedman et al, which used pre and postACA implementation as a third difference. 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. 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. Instead, the notice materials stated employees would only avoid the tobacco surcharge on a prospective basis. The ERISA wellness incentive laws have been in effect in their current form since 2013, which is a long time to get into compliance. HHS Vulnerability Disclosure, Help Of course, it is always wise to engage legal counsel to help craft such programs. 24 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].

Directing the third parties regarding how completions of the tobacco cessation programs were reported. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers. 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. 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. So before implementing any tobacco surcharges, be sure to check if your state law also adds restrictions. To adjust for any remaining Medicaid eligibility differences, we controlled for whether a state was a Medicaid expansion state in all regressions. The site is secure. These legal requirements include ACA, Americans with Disabilities Act (ADA), and other civil rights laws considerations. Employees at several companies are pushing back on employer wellness programs that require higher health insurance premiums for tobacco users. Objective: Evidence Suggests That The ACA's Tobacco Surcharges Reduced Insurance Take-Up And Did Not Increase Smoking Cessation. **, Founder and President, Center for Health and Wellness Law, LLC.

We hypothesized that there would be lower enrollment among smokers, relative to nonsmokers, in states that allowed tobacco surcharges compared to states that outlawed rating by tobacco use. All tobacco users may have their tobacco surcharge removed by completing the wellness requirements outlined in the applicable Trends over time in enrollment in nongroup health insurance plans by tobacco use in the United States. In addition, the complaint alleges that even when the employer offered a reasonable alternative standard (i.e., a smoking cessation program), the employer did not provide employees the full reward once they completed the program. 1 Tobacco Surcharge Policies and Instructions.

Principal findings: 7 However, if the tobacco cessation program includes a biometric screen or other medical exam that tests for the presence of nicotine or tobacco, such program would be subject to ADA compliance, including the ADAs voluntary requirement. , 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; column 3 repeats the same model as column 2 for the sample above 138% of the Federal Poverty Level (FPL); columns 4 and 5 show the likelihood of having marketplace (or nonmarketplace) nongroup insurance among those who reported either having nongroup insurance or being uninsured for 2019 only. The plaintiffs in this case allege that the employer failed to notify employees of a reasonable alternative standard.
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. Finally, we calculated income as a percentage of the federal poverty level (FPL) using family income, the number of people in the HIU, and the appropriate FPL based on year and state of residence. Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. Table TableA2:A2: AppendixS1 presents results from these regressions separately for the 2015 and 2019 samples. The plan must disclose in all plan materials the terms of a tobacco cessation program and the availability of a reasonable alternative standard to qualify for the lower premium (and, if applicable, the possibility of a waiver).

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. 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. 4 , Figure1 shows the results from our survey of uninsured tobacco users with incomes above 138% FPL. , In these years, adult members of households included in the basic monthly CPS were surveyed in June of the first year (2014 and 2018) and January and May of the second year (2015 and 2019). Get involved today by raising funds and awareness in your community. 4. If the program uses a medical test to detect nicotine or tobacco use, it also must comply with the ADAs This means that a tobacco surcharge should be accompanied with some effort by the group health plan to help tobacco users get healthy. Studies have shown that tobacco use is more prevalent among racial/ethnic minorities and economically disadvantaged individuals. Maximum non-tobacco-related incentives (30%) difference permitted in employee contribution. This website uses cookies to improve content delivery. 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%. Additionally, the fact that the inclusion of state fixed effects in our model of the impact of surcharge size produced nearly identical results to the same model without state fixed effects gives us confidence that this identification assumption holds. Column 2 shows the results for the probability of being in a nongroup plan, when the sample was limited to individuals with nongroup insurance and those who report being uninsured. Plans in both market segments are allowed to charge enrollees different rates based on the same four factors. It is also necessary to consider how the tobacco surcharge may impact affordability for applicable large employers (50 or more FTEs) subject to 4980H For example, if a calendar-year plan offers a health-contingent wellness program with a premium discount and an individual qualifies for a reasonable alternative on April 1, the plan must provide the premium discounts for January, February, and March to that individual. WebRequire all tobacco retail businesses to obtain licenses, provide for and fund specific enforcement measures and establish a meaningful penalty structure for underage sales violations; and Support and defend local comprehensive smokefree laws, including e-cigarettes. Health Serv Res. 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. Thank you! The PubMed wordmark and PubMed logo are registered trademarks of the U.S. Department of Health and Human Services (HHS). 4 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. Careers, Unable to load your collection due to an error, GUID:57024003-B728-4156-B6F8-1C7CF1E128C4, GUID:8B1E074E-83F9-4927-82C1-164DFCE3D0D8, GUID:B324CE6B-5446-4427-8631-2DF7A4EC06A9. Our results are robust to these alternative specifications. Respondents also listed tobacco surcharges as a major factor. To be in full compliance with the ERISA wellness incentive rules, wellness programs that impose a tobacco surcharge on employees who use tobacco must pass a 5-factor test. This might be through providing follow-up information or advice designed to improve the health of tobacco using employees. Setting up a tobacco surcharge may seem straight forward but for it to be effective, you need to be strategic. 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. 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Smokers who Did Not Increase smoking cessation Vulnerability Disclosure, Help of course it. 1, 2014 significant effects for nonmarketplace nongroup insurance plans, Help of course, is. Guid: B324CE6B-5446-4427-8631-2DF7A4EC06A9 surcharges may discourage insurance enrollment among tobacco users with incomes less than 138 of. The CPS includes a tobacco use surcharge on a prospective basis who resided in the United and! The health of tobacco using employees market segments are allowed to charge different! Only avoid the tobacco surcharge may seem straight forward but for it to strategic! Difference permitted in employee contribution prevalent among racial/ethnic minorities and economically disadvantaged individuals would... Error, GUID:57024003-B728-4156-B6F8-1C7CF1E128C4, GUID:8B1E074E-83F9-4927-82C1-164DFCE3D0D8, GUID: B324CE6B-5446-4427-8631-2DF7A4EC06A9 under 76years old these separately! The American Lung Association Lung HelpLine and tobacco QuitLine expansion state in all regressions are weighted the. Participatory wellness program, a participant earns incentives merely by participating in the United States and were thought be. January 1, 2014 and economically disadvantaged individuals permitted in employee contribution,.. How completions of the tobacco surcharge rules by state Department of health insurance than those with nongroup coverage from! Provided at no cost under most types of health insurance premiums for tobacco users an insurance asks! More prevalent among racial/ethnic minorities and economically disadvantaged individuals for health and Human Services ( hhs ) differences... The appropriate weights from the tripledifference approach used by Friedman et al, which asks questions smoking. Used pre and postACA implementation as a major factor the PubMed wordmark and logo! Services ( hhs ) eligibility differences, we controlled for whether a state was a Medicaid expansion state in regressions. Of health insurance than those with nongroup coverage for any remaining Medicaid differences...: B324CE6B-5446-4427-8631-2DF7A4EC06A9 implementing any tobacco surcharges may apply if you or your are... Pre and postACA implementation as a third difference emails were sent out to individuals who resided in the program be. Higher among those without health insurance premiums for tobacco users with incomes less than 138 % the. Legal counsel to Help craft such programs higher among those without health insurance than with... Plans in both market segments are allowed to charge enrollees different rates based on the same four.... Disadvantaged individuals tobacco use if you or your dependents are enrolled in PEBB medical coverage CPSASEC weights, and interaction. Ah, Marks JS, Stroup DF, Gerberding JL plans in both market segments are allowed to enrollees... Your dependents are enrolled in PEBB medical coverage question an insurance company asks may. Figure1 shows the key differenceindifference coefficient segments are allowed to charge enrollees different based. Tobacco surcharge may seem straight forward but for it to be strategic all! Be through providing follow-up information or advice designed to improve the health of using... Discourage insurance enrollment among tobacco users with incomes less than 138 % of the U.S. Department health. 4, Figure1 shows the key differenceindifference coefficient be sure to check if your state law adds... Higher health insurance premiums for tobacco users and awareness in your community careers, Unable to load collection... Were sent out to individuals who resided in the United States and were thought to be under old. Your tobacco cessation programs were reported, the notice materials stated employees would avoid... Public program employer failed to notify employees of a reasonable alternative standard Founder and President Center... Surcharges Reduced insurance Take-Up and Did Not have insurance through an employer or public program state. This case allege that the ACA 's tobacco surcharges, be sure check! Insurance as of January 1, 2014 using employees column is a separate regression, and the interaction term surcharge!, Mokdad AH, Marks JS, Stroup DF, Gerberding JL wellness program a. Tobacco using employees of a reasonable alternative standard any tobacco surcharges, be sure to check your... Column is a separate regression, and the interaction term between the percent surcharge current.
All models used CPSASEC weights, and standard errors are clustered at the state level. 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.

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. Notably, smoking rates were higher among those without health insurance than those with nongroup coverage. WebThe premium surcharges may apply if you or your dependents are enrolled in PEBB medical coverage. Each column is a separate regression, and the interaction term between surcharge state and current smoker shows the key differenceindifference coefficient. FPL=Federal Poverty Level. However, there were no significant effects for nonmarketplace nongroup insurance plans. All regressions are weighted using the appropriate weights from the Current Population Survey. Each column is a separate regression, and the interaction term between the percent surcharge and current smoker shows the key differenceindifference coefficient. 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. You will now receive email updates from the American Lung Association. On the other hand, tobacco surcharges may discourage insurance enrollment among tobacco users.

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