tobacco surcharge rules by state

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. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. 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 examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. 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. 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. 10 Some states have made it illegal for insurance companies to implement a surcharge. In some of the circumstances, there may not be any surcharge for tobacco users. First, there is known overreporting of nongroup health insurance plan participation among Medicaid eligible respondents in survey data including the CPS. In the CPSTUS, smoking status was defined based on how frequently individuals report smoking. She is also lead author of the book, Rule the Rules on Workplace Wellness Programs, published by the American Bar Association. Other states like Kentucky, Arkansas, and Colorado allow a lower premium differential than federal law. State fixed effects were included in columns (2) and (4) include state fixed effects; however, they did not substantially affect the results. As demonstrated below, tobacco surcharges can vary from state to state. 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 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; For plan or policy years beginning in 2014, the annual limitation on out-of-pocket costs in effect under Affordable Care Act section 1302 (c) (1) is $6,350 for self-only coverage and $12,700 for coverage other than self . 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. Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. 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. Click here to contact our editorial staff, and click here to report an error. Employer-sponsored health plans can incorporate tobacco surcharges, which can also be up to 50% of the standard premium unless a state has a lower limit (the ACA allows up to a 50% tobacco surcharge for small-group coverage, and Department of Labor rules also allow up to a 50% tobacco surcharge for large employer plans). Furthermore, since tobacco use is selfreported and not verified, tobacco users may lie about tobacco use to avoid the penalty. 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. Before Pesko et al found that marketplace enrollment among tobacco users grew at a substantially slower rate than enrollment among all other enrollees in the first two years of the marketplaces. Notably, our point estimates are in line with those reported by Friedman et al Agents are available: Mon - Fri, 8 AM - 8 PM ET. Albeit, the use of tobacco for religious or ceremonial purposes are excluded from the rule. Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program. Abbreviations: AGI, Adjusted Gross Income; FPL, Federal Poverty Level; HIU, Health Insurance Unit; SD, standard deviation. This allows employees to avoid the surcharge by participating in the cessation program. But Macys tobacco affidavit also said, I understand that the tobacco surcharge will not be changed retroactively, and no refunds or credits will be issued.. Column 4 shows that smokers were 11.5 percentage points (P<.01) less likely to be enrolled in a marketplace plan if they lived in a state with a tobacco surcharge than if they lived in a state without a tobacco surcharge. 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. Each column is a separate regression, and the interaction term between surcharge state and current smoker shows the key differenceindifference coefficient. CA, 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 . Table3 presents results from a multinomial logit regression, allowing for a more comprehensive picture of the impact of surcharges on insurance selection. Theoretically, tobacco surcharges could lead to lower premiums for nonusers, which could potentially lead to higher enrollment among that group. 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 practice of implementing a surcharge to recoup the costs of credit card processing fees was illegal across the country for several decades. Approximately every four years, the CPS includes a Tobacco Use Supplement (CPSTUS), which asks questions about smoking and tobacco use. We compared insurance enrollment in states that did and did not allow tobacco surcharges, using a differenceindifference approach to compare the policy effects among smokers and nonsmokers. Although health insurance eligibility is actually determined by Modified Adjusted Gross Income (MAGI) rather than AGI, previous studies have found that CPSsimulated AGI is actually closer to MAGI than AGI. Table TableA1:A1: AppendixS1 presents summary statistics by insurance type separately for the 2015 and 2019 samples. Liber AC, Hockenberry JM, Gaydos LM, Lipscomb J. Finally, we gathered data on tobacco surcharges from the CMS Health Insurance Exchange Public Use Files for 2015 and 2019. To learn more: Call 1-866-NY-QUITS (1-866-697-8487) toll free; Text (716) 309-4688; or. , 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). 3 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. Public insurance includes Medicare, Medicaid, VA, CHAMPUS, Tricare, and Indian Health Service. Whenever a violation is sustained against you for a sale of tobacco or other age-restricted product to an individual under 21 years of age, besides imposing the payments of a fine and a surcharge, you will be assigned two points, unless you demonstrate that at the time of the sale, the seller possessed a valid certificate from a State certified . 41. Company employs a couple thousand in the US 2) use tobacco and be subject to the surcharge. 26 Additionally, recent research has cast doubt on whether small employers complied with either the rating rules or the exemption for tobacco cessation, particularly in the early years of the ACA. Table1 compares sample characteristics across insurance type. Liber AC, Drope JM, Graetz I, Waters TM, Kaplan CM. However, the Centers for Medicare and Medicaid Services has issued a subsequent rule that defines tobacco use as the use of any tobacco product within the last six months with a frequency of at least four times per week. September 29, 2021. 7 What is the amount of the tobacco surcharge? What is a tobacco surcharge? These data were only available for the 38 states that participated in the federal exchange. Study design: Alaska increased its tobacco age restriction from 16 to 19 in 1988. and text messages is not a condition for purchase. Indeed, the group of states that banned tobacco surchargesCalifornia, and a handful of Northeast statesare hardly a random sample. 7 Download our quit-smoking calendar and tip sheet for creative ideas on how and when to promote quitting tobacco to maximize engagement. How Much Protected Are You After Being Vaccinated against COVID-19? An official website of the United States government. You also agree that: (i) [InsureMeNow] may share your personal information with its third-party Impact of state surcharge size enrollment in a health insurance planresults from differenceindifference linear probability model. States Vary on Higher Premiums Paid by Tobacco Users Under the ACA Kansas insurers applying up to 44 percent surcharge for tobacco users in 2015 11 Min Read Sep 09, 2015 By Linda J. Sheppard, J.D. and transmitted securely. Health Aff (Millwood). 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. Arkansas limits it to 20%, and Kentucky limits it to 40%. Trends over time in enrollment in nongroup health insurance plans by tobacco use in the United States. 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. We first examined the impact of tobacco surcharges on the likelihood of having any type of health insurance. 102. Additionally, our identification strategy relies on the assumption that states that do not have tobacco surcharges do not have other unobservable characteristics that may differentially impact enrollment for tobacco users and nonusers that are not accounted for in our model. Operations: Meghann Olshefski Mandy Morris Kelly Rindfleisch New York and Vermont are the two states where health insurance premiums are not based on age. The tobacco products that are counted include traditional cigarettes, cigars, chewing tobacco, e-cigarettes, vaping, and pipe smoking. By 1920, 46 states had implemented an age limit for tobacco sales, of which 14 set the limit at 21. John Lehman. After calculating AGI, we excluded adults over 65 since they would likely be covered by Medicare. Clipboard, Search History, and several other advanced features are temporarily unavailable. Nearly Half Of Small Employers Using Tobacco Surcharges Do Not Provide Tobacco Cessation Wellness Programs. External Relations: Moira Delaney Hannah Nelson Caroline Presnell Health Aff (Millwood). Tobacco attestation is the section of the enrollment process for the State Health Plan that asks a question about tobacco use. Alabama's tobacco age restriction had been above 18 since at least the 1960s. 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 also excluded children under 19 who did not participate in the CPSTUS and who qualify for Medicaid/CHIP at higher income thresholds than adults. 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 tobacco surcharge only applies to UAB employees. and quitting smoking can significantly improve health outcomes. 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. Like the Macys case, this case is still pending. Respondents also listed tobacco surcharges as a major factor. Joint Acknowledgment/Disclosure Statement: This study was funded by a grant from the American Cancer Society (RSGI1723401CPHPS). All regressions are weighted using the appropriate weights from the Current Population Survey. Income eligibility for assistance under the affordable care act: technical memorandum on estimates for nonelderly adults. This table presents estimates from a differenceindifference linear probability model, examining the likelihood of the outcome of interest for smokers in surcharge states. The nationwide average pre-subsidy premium in 2020 is about $576 per month for health plans sold in the exchange. Tobacco surcharges on 2015 health insurance plans sold in federally facilitated marketplaces: variations by age and geography and implications for health equity, Marketplace premiums rise faster for tobacco users because of subsidy design, Putting policy theory to work: tobacco control in California, Most exchange plans charge lower tobacco surcharges than allowed, but many tobacco users lack affordable coverage, Health insurance surcharges for tobacco use declined among small employers in 2018: an analysis of trends in small employer tobacco surcharges and cessation programs, Nearly half of small employers using tobacco surcharges do not provide tobacco cessation wellness programs, Evidence suggests that the ACAs tobacco surcharges reduced insurance takeup and did not increase smoking cessation. All regressions are weighted using the appropriate weights from the Current Population Survey. Youth access to tobacco law-RCW 70.155: Prohibits the sale and distribution of tobacco products to minors. Results showing the impact of the size of tobacco surcharges are presented in Table4. 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. 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. Here are key things you need to know about tobacco surcharges and recent activity with lawsuits. However, since theoretically tobacco surcharges should primarily affect the decision to purchase nongroup insurance, our preferred specification excluded individuals who had insurance either through an employer or a public program such as Medicare, Medicaid, or Military insurance. In order to aggregate surcharge data to the state level, we first computed the median surcharge in each marketplace rating area by calculating the ratio between the plan premiums offered to tobacco and nontobacco users for a 45years old. Tobacco. 2022 News; 2021 News; 2020 News; 2019 News; 2018 News; 2017 News; 2016 News; 2015 News; 2014 News; 2013 News; If you would like to help our coverage grow, consider donating to Ballotpedia. However, it is the case only if they dont use tobacco but if they do use tobacco then the tobacco surcharge may result in unaffordable health insurance premiums for these people. Tobacco surcharges and the state laws that limit them theoretically have varying effects on different segments of the health insurance market. We used linear probability models with a differenceindifference specification. The ePub format uses eBook readers, which have several "ease of reading" features You may switch to Article in classic view. During the 1920s and 1930s, state laws trended towards a limit of 18 years. 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. 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, if banning surcharges is not feasible, policy makers might consider limiting surcharges to below the 50% federal cap. This site needs JavaScript to work properly. Among other requirements, in order for a tobacco surcharge to be permissible, the employer must offer a reasonable alternative to obtaining the reduced premium. The Affordable care Act allows health insurers to charge a 1.5-to-1 ratio for tobacco use. Specifically, our model compares the insurance status of smokers to nonsmokers across states with and without tobacco surcharges. 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. , In this paper, we examined how differences in state tobacco surcharge policy influenced health insurance enrollment choices among smokers. To adjust for other potential differences across states, we controlled for Medicaid expansion status, the use of a statebased marketplace, tobacco taxes, and clean indoor air policies. As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. The functionality is limited to basic scrolling. Surveys. 2020;55:983992. Tobacco Use People who use tobacco can be charged up to 50% more than the people who dont use tobacco. Additionally, tobacco surcharges function to increase the cost of health insurance for smokers, which was the most commonly cited reason for not choosing to enroll in a nongroup plan. Bethesda, MD 20894, Web Policies Health Aff (Millwood). Plans in both market segments are allowed to charge enrollees different rates based on the same four factors. . Marketplace Premiums Rise Faster For Tobacco Users Because Of Subsidy Design. 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 Although third parties helped administer the tobacco cessation program for Macys, Macys had ultimate control of the wellness program, including: Because of these alleged violations, the DOL is asking the court for the following relief (in relation to the wellness program violations): Also in November 2021, a federal district court in Missouri certified a class action of 1500 casino workers who alleged, similar to the Macys case, that their employer violated ERISA with its tobacco surcharge. More Benefits Insight Cafeteria Plan COLA May Require . States that prohibit tobacco surcharges completely are California, Massachusetts, New Jersey, New York, Rhode Island, Vermont, and Washington, D.C. Connecticut also prohibits tobacco surcharges, but only for health plans sold in the state's health insurance exchange (Access Health CT). For example, tobacco surcharges could lead to less employer coverage as a result of higher premiums for tobacco users in the small group market or if large employers were more likely to charge surcharges in states that allowed them in small group and nongroup markets. Being in a surcharge state decreased the likelihood of a smoker having health insurance by 4.0 percentage points (P=.02). Though the Affordable Care Act has included a provision to allow insurers to charge higher premiums from tobacco users but has not specified what constitutes tobacco use. Moreover, the employers failed to give participants who met the RAS a way to avoid the surcharge retroactively, which is required under HIPAA's wellness rules. , Since tobacco surcharges can be set at the state level, this policy may be more easily altered than other aspects of the ACA which are subjected to federal regulation. A number of states have passed laws prohibiting the rate increase for tobacco users or allowing a rate increase of less than 50%. official website and that any information you provide is encrypted Although the majority of states do allow insurers to impose tobacco surcharges of up to 50%, many insurers choose to use smaller surcharges or skip them altogether. We then asked respondents to select all reasons they did not enroll in a marketplace plan. Pipe smoking towards a limit of 18 years number of states that banned tobacco surchargesCalifornia, and other..., health insurance plans by tobacco use people who use tobacco can be charged up 50! 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