, 41. Directing the third parties regarding how completions of the tobacco cessation programs were reported. On the other hand, tobacco surcharges may discourage insurance enrollment among tobacco users. One important limitation of our study is that although we compare enrollment rates by smoking status, smoking status is not experimentally varied across groups. 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. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Thus, a family of five will pay a higher monthly premium compared to a family of three. On May 20, 2019, Sen. Mitch McConnell (R) introduced a bill which would increase the tobacco age restriction to 21 at the federal level. 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). The interaction terms between surcharge state and current smoker show the key differenceindifference results. This means that health insurers can charge individual and small group tobacco users up to 50% more than non-tobacco users. The survey included tobacco users age 1864 with incomes above 138% FPL who reported being uninsured or insured through a marketplace plan. Finally, in several specifications we excluded families with incomes less than 138% of the federal poverty level for the following two reasons. 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. Employees at several companies are pushing back on employer wellness programs that require higher health insurance premiums for tobacco users. The ePub format is best viewed in the iBooks reader. marketing materials using the information you provide. Finally, all models adjusted for year of survey (2015 or 2019). 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. 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. All regressions are weighted using the appropriate weights from the Current Population Survey. This is due to a "tobacco surcharge". 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. 1 Plans in both market segments are allowed to charge enrollees different rates based on the same four factors. She is also lead author of the book, Rule the Rules on Workplace Wellness Programs, published by the American Bar Association. (May 13, 2013) On May 9, 2013, that the Executive Yuan (Cabinet) of the Republic of China (on Taiwan) approved amendments to the Tobacco and Alcohol Tax Act and to the Tobacco Hazards Prevention Act that, if they become law, would, respectively, increase the taxes and the health surcharge on tobacco products. 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. 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 . and transmitted securely. Tobacco users can . Although state tobacco rating rules typically do not apply to large employers, it is possible that there are spillover effects. For the purposes of this study, we limited the sample to uninsured individuals (N=519). 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. Section 1302 (c) (1) limits out-of-pocket costs and, for small group market plans, section 1302 (c) (2) limits deductibles. We also calculated state policy variables to adjust for differences that may be correlated with tobacco surcharge policy and health insurance enrollment including whether the state was a Medicaid expansion state and the use of a statebased marketplace. Careers. However, the employers imposing a tobacco surcharge are also supposed to offer a tobacco cessation program. Actual causes of death in the United States, 2000. Age The health insurance premiums are based on an individuals age, as older people are charged higher premiums compared to younger people. Tom Wolf (D) on November 27, 2019, Pennsylvania's tobacco age restriction was set to increase from 18 to 21 on July 1, 2020. 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. As demonstrated below, tobacco surcharges can vary from state to state. The outcome variable represents four categories of insurance typeuninsured (omitted), nongroup, employer, and public. 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. 18% said that having to pay more for premiums due to tobacco use was a reason that they did not enroll, and 7% said it was the main reason they did not enroll. The CPS is a nationally representative, longitudinal survey that follows households over the same four consecutive months for two consecutive years (ie, four months on, eight months off, four months on). Table TableA2:A2: AppendixS1 presents results from these regressions separately for the 2015 and 2019 samples. The ACA's individual mandate in retrospect: what did it do, and where do we go from here? Theoretically, surcharges could also lead to reduction in smoking by imposing a financial penalty for the behavior. 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.. 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. State Specific Rating Variations. However, our models adjusted for other state policies that may affect insurance enrollment and tobacco use. 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. Smokers living in states with high tobacco surcharges are less likely to have health insurance. Arkansas limits it to 20%, and Kentucky limits it to 40%. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. The .gov means its official. All models used CPSASEC weights, and standard errors are clustered at the state level. **, Founder and President, Center for Health and Wellness Law, LLC. 4 A $50 monthly tobacco surcharge will be applied to employees who declare tobacco usage. Abbreviations: AGI, Adjusted Gross Income; FPL, Federal Poverty Level; HIU, Health Insurance Unit; SD, standard deviation. 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. The tobacco products that are counted include traditional cigarettes, cigars, chewing tobacco, e-cigarettes, vaping, and pipe smoking. 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. Tobacco use is the largest cause of preventable illness in the United States. Allowing higher premiums for tobacco use in the nongroup market results in lower health insurance enrollment among smokers, which is driven by decreased enrollment in the nongroup market. Learn 4 tips for making your tobacco cessation program more successful. Agents are available: Mon - Fri, 8 AM - 8 PM ET. 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. Among other requirements, in order for a tobacco surcharge to be permissible, the employer must offer a reasonable alternative to obtaining the reduced premium. 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. 64C increased to $3.51 per pack. Nineteen of those states set the tobacco age restriction to 21 before the federal law took effect, while the other 19 did so after the federal law took effect. It does not apply to dependents covered under the medical plan. 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. Gehr Family Center for Health Systems Science and Innovation, Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program. The site is secure. 10.1111/1475-6773.13577 Specifically, the employer, a casino, imposed a $50/month tobacco surcharge on health insurance on employees who used tobacco. 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. Click here to contact us for media inquiries, and please donate here to support our continued expansion. 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. Notably, smoking rates were higher among those without health insurance than those with nongroup coverage. Finally, we gathered data on tobacco surcharges from the CMS Health Insurance Exchange Public Use Files for 2015 and 2019. States Charging Below 50%:6 Arkansas - 20% Colorado - 15% Kentucky - 40% States Charging the Maximum 50%:7 States Which Prohibit Tobacco Rating Completely:6 California Massachusetts New Jersey New York Rhode Island Vermont Washington D.C. Subsidies and Tobacco Surcharges Reasons for not enrolling in marketplace coverage. Health Serv Res. 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. Youth access to tobacco law-RCW 70.155: Prohibits the sale and distribution of tobacco products to minors. However, organizations like the American Cancer Society and the American Lung Association believe that higher health insurance premiums for tobacco users make health coverage less accessible to people using tobacco. 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. Evidence Suggests That The ACA's Tobacco Surcharges Reduced Insurance Take-Up And Did Not Increase Smoking Cessation. There has been a flurry of activity lately involving employer wellness programs that impose a tobacco surcharge on health insurance. 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. 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. It is now looking at a state-by-state approach to work on rolling back . 18. Download our quit-smoking calendar and tip sheet for creative ideas on how and when to promote quitting tobacco to maximize engagement. We used two important supplements to the CPS. This blog post is for informational and educational purposes only. Clipboard, Search History, and several other advanced features are temporarily unavailable. Massachusetts has many laws that govern tobacco: Tobacco excise taxes. In other words, according to the plaintiffs, the employer did not give them a reasonable alternative standard, like a tobacco cessation program, to avoid the $50/month surcharge. FPL=Federal Poverty Level. Marketplace Premiums Rise Faster For Tobacco Users Because Of Subsidy Design. University of Southern California, Thus, people who use tobacco are advised to not just avoid health insurance because many health insurers have implemented smaller surcharges or some have also sip them altogether. 4 Modification in the tobacco surcharge has been prohibited in some of the states. Access to insurance and health care may be particularly important for tobacco users because they are at higher risk of developing numerous chronic health conditions and because all health insurance plans are required to provide tobacco cessation as an essential health benefit with no outofpocket costs. Notably, using data from the Behavioral Risk Factor Surveillance System, Freidman and colleagues found the probability of having insurance was reduced among smokers in states with high tobacco surcharges relative to states without surcharges. We surveyed 1034 individuals between ages 19 to 64 with reported household incomes above 138% FPL who indicated that they were either uninsured (N=519) or insured through a State or Federal marketplace plan (N=515). Providing adequate notice about the reasonable alternative standard is also mandatory. This decision of the ACA lawmakers turned out to be controversial, as some people believed that it is fair to charge higher premiums from tobacco users considering the adverse effect caused by the tobacco to a persons health and the additional cost incurred upon tobacco-related health problems. 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 tobaccorelated disease. 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. Help expand Ballotpedia's elections coverage - volunteer with us. Here are key things you need to know about tobacco surcharges and recent activity with lawsuits. [PMC free article] [PubMed] [CrossRef] [Google Scholar], 1 The results from the linear probability models are shown in Table2. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers. Operations: Meghann Olshefski Mandy Morris Kelly Rindfleisch 54:40A-4.1 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. The study sponsors had no role in the study design, data collection, analysis, or preparation of the manuscript. Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. #1. Plan members need to attest to their tobacco status in their Virgin Pulse portal by May 31, 2022. Second, due to Medicaid expansions, eligibility for marketplace subsidies and Medicaid overlaps between 100% and 138% FPL in some states, but not others. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Tobacco Surcharges. Tobacco Surcharges Associated With Reduced ACA Marketplace Enrollment. [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. Under a law signed by Gov. During the 1920s and 1930s, state laws trended towards a limit of 18 years. 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. Benefits Insight. 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. The first law in the United States regulating the sale of tobacco by age was passed in New Jersey in 1883 and set a minimum age of 16. already built in. As of January 1, 2021, 32 states and the District of Columbia set the minimum sales age at 21 years old; Mississippi set the minimum sales age at 21 for some tobacco products and 18 for others; two states set the minimum sales age at 19 years old and 15 states set the minimum sales age at 18 years old. New York and Vermont are the two states where health insurance premiums are not based on age. 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. 20 Tobacco use is the largest cause of preventable disease and death in the United States, 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. , Our estimates indicate that the probability that a smoker had insurance decreases by 3.4 percentage points (P<.01) relative to nonsmokers for a 10 percentage point increase in the size of the tobacco surcharge. 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 . 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. Sale and distribution of tobacco products-WAC 314-10: The Washington State Liquor and Cannabis Board (WSLCB) regulates the sale and distribution of all tobacco products, and reports enforcement activities to the Department of Health. Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. 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. 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. Columns 4 and 5 show results when nongroup plan enrollment was split by whether the plan was offered through the ACA marketplaces for the 2019 sample. Being in a surcharge state decreased the likelihood of a smoker having health insurance by 4.0 percentage points (P=.02). 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. Americans Make Use of your Health Coverage Even while Being Healthy. 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. 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. 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 official website and that any information you provide is encrypted [5][6] Over 54% of the country's population lived in states that had signed legislation setting 21 as the tobacco restriction age at the time the federal law set the nationwide tobacco age restriction. 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; columns 3 and 4 show the likelihood of having marketplace insurance among those reporting having nongroup insurance or being uninsured. 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). 2 **Please Note: Nothing contained in this blog post is to be construed as legal advice. (ROC Cabinet OKs [] The tobacco age restriction across the country is 21 as a matter of federal law. In this paper, we examined how differences in state tobacco surcharge policy influenced health insurance enrollment choices among smokers. 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. These people are also less likely to receive timely medical treatment at the time when they will need it. 5 More Mercer posts The program may include a tobacco surcharge to help motivate employees. 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. Our analysis also found that tobacco surcharges have a . This table presents estimates from a differenceindifference linear probability model, examining the likelihood of the outcome of interest for smokers in surcharge states. Health Serv Res. [13] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. Geographic Location The costs of health insurance premiums are not the same in every zip code, and vary from one area to another. PMC 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). The ePub format uses eBook readers, which have several "ease of reading" features 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. 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. 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. 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. 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. , Duncan MS, Freiberg MS, Greevy RA, Kundu S, Vasan RS, Tindle HA. Although we did not have data from other years, the fact that our results were similar across the two years gives us confidence that pooling the data is a valid approach. Trends over time in enrollment in nongroup health insurance plans by tobacco use in the United States. 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. Further, we included state tobacco policy variables which we calculated from the CDC State Tobacco Activities Tracking and Evaluation System and included state cigarette taxes per pack and a measure of clean indoor air policies that were coded as 1 if the state banned smoking in all indoor bars, restaurants, and private workplaces and 0 otherwise. First, there is known overreporting of nongroup health insurance plan participation among Medicaid eligible respondents in survey data including the CPS. As additional robustness checks, we also examined subsamples including individuals with incomes between 138% FPL and 400% FPL, who are most likely to qualify for subsidies and those older than 25 who no longer qualify for dependent coverage. Jun 28, 2013. It is witnessed that among all the exchange enrollees, 86% of people qualify for premium subsidies that amount to an average of nearly $492 per month. Theoretically, tobacco surcharges could lead to lower premiums for nonusers, which could potentially lead to higher enrollment among that group. Allowing tobacco surcharges at all and having larger tobacco surcharges were each associated with lower takeup of insurance. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers. 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. In addition, there is large variation in tobacco surcharges even within states that allow surcharges since most insurers do not charge the maximum allowable surcharge. In order to focus on health insurance coverage among individuals most likely to be affected by tobacco surcharges, we made several sample exclusions. We assigned primary coverage to each respondent based on the following hierarchy: Medicare, employer, nongroup, Medicaid, other public, and uninsured. Ten Democratic governors and eight Republican governors signed increases in tobacco age restrictions during this time.[3]. 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 The "tobacco surcharge" won't be offset by federal tax credits, hitting smokers with a double whammy. Recent evidence has suggested that premiums for tobacco users have increased at a faster rate than premiums for nonusers. Additionally, tobacco users in a small business may be able to avoid the penalty by participating in a tobacco cessation program through . The American Cancer Society opposed the tobacco rating provision during the congressional debate about the health-care law. High premiums and tobacco surcharges are reported by smokers to be barriers to enrollment in marketplace coverage. Joint Acknowledgment/Disclosure Statement: This study was funded by a grant from the American Cancer Society (RSGI1723401CPHPS). 12 Los Angeles State agency staff should ensure employees are aware of the tobacco cessation programs available to them. CA, Alaska increased its tobacco age restriction from 16 to 19 in 1988. 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.
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