As demonstrated below, tobacco surcharges can vary from state to state. Notably, our point estimates are in line with those reported by Friedman et al , This report must include the name of each insurance carrier on behalf of which the TPA paid. 102. Here are key things you need to know about tobacco surcharges and recent activity with lawsuits. In addition to the RRRs 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). While in most states a tobacco surcharge is permitted, the rules have become quite complex. You may switch to Article in classic view. USA. Study design: Another potential consideration is the effect of tobacco surcharges on nonusers. Six states and DC have banned tobacco surcharges in their entire individual market: California District of Columbia Massachusetts New Jersey New York Rhode Island Vermont Virginia lawmakers passed legislation in 2022 that would have banned tobacco surcharges as of 2023, but the governor vetoed the measures. Each column is a separate regression, and the interaction term between surcharge state and current smoker shows the key differenceindifference coefficient. 2022 News; 2021 News; 2020 News; 2019 News; 2018 News; 2017 News; 2016 News; 2015 News; 2014 News; 2013 News; Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. 10.1111/1475-6773.13577 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. 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. 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. Research: Josh Altic 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. 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. 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. Within households, we defined health insurance units (HIUs) which include an individual, their spouse if they are married, and all dependent children of either the reference individual or their spouse. State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment. 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. However, our models adjusted for other state policies that may affect insurance enrollment and tobacco use. 3 Other states like Kentucky, Arkansas, and Colorado allow a lower premium differential than federal law. In order to provide context to our results on the reasons tobacco users did not enroll in health insurance, we also included separate data from a June 2019 online survey conducted using Qualtrics Research Panel. . Providing adequate notice about the reasonable alternative standard is also mandatory. Figure1 shows the results from our survey of uninsured tobacco users with incomes above 138% FPL. Accessibility 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. PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. The plaintiffs in this case allege that the employer failed to notify employees of a reasonable alternative standard. [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. This site needs JavaScript to work properly. , 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. affordable care act, enrollment, health insurance, marketplace, premiums, smoking, tobacco surcharge, Reasons for not enrolling in marketplace coverage. Section 1302 (c) (1) limits out-of-pocket costs and, for small group market plans, section 1302 (c) (2) limits deductibles. 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. 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. Bookshelf Instead, the employer gave employees only two options: 1) dont use tobacco and avoid the surcharge; or. In addition, 14 percent used . Age The health insurance premiums are based on an individuals age, as older people are charged higher premiums compared to younger people. 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. 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. All columns are derived from a single multinomial logit regression, and each column presents the relative risk ratios (RRR), comparing the risk of being in the insurance type of interest and being uninsured. 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. 2) use tobacco and be subject to the surcharge. FPL=Federal Poverty Level. Tobacco users can . The program may include a tobacco surcharge to help motivate employees. 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 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. This blog post is for informational and educational purposes only. 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 survey included tobacco users age 1864 with incomes above. Tobacco age restrictions can take the form of limits on the sale of tobacco by age, limits on tobacco possession by age, or a combination of the two. Our analysis also found that tobacco surcharges have a . The ACA's individual mandate in retrospect: what did it do, and where do we go from here? 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). Los Angeles 8 CarterHarris L, Slaven JE Jr, Monahan PO, SheddSteele R, Hanna N, Rawl SM. 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. Tobacco use is the largest cause of preventable illness in the United States. During the 1920s and 1930s, state laws trended towards a limit of 18 years. Theoretically, tobacco surcharges could lead to lower premiums for nonusers, which could potentially lead to higher enrollment among that group. 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. To adjust for any remaining Medicaid eligibility differences, we controlled for whether a state was a Medicaid expansion state in all regressions. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. 2 Beginning January 1, 2014 health insurance plans and employers will be able to charge up to 50% more. 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. Third Party Administrators (TPAs) that make payments to hospitals and ambulatory surgical centers on behalf of one or more insurance carriers (not self-insured plans) must file an annual electronic report with the HSN. [11] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. This paper contributes to a small existing literature on the impact of tobacco surcharge laws on health insurance enrollment. Come Jan. 1, smoking is one of the few allowable factors . Tobacco use is the largest cause of preventable illness in the United States. 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 . 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. and quitting smoking can significantly improve health outcomes. Additionally, tobacco users in a small business may be able to avoid the penalty by participating in a tobacco cessation program through . 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. and text messages is not a condition for purchase. Columns 3, 4, and 5 show results limiting the sample to individuals with incomes above 138% FPL, which includes those who have incomes too high to qualify for Medicaid under the expansions, but who are eligible for subsidies in the marketplaces and are thus more likely to be affected by tobacco surcharges. To learn more: Call 1-866-NY-QUITS (1-866-697-8487) toll free; Text (716) 309-4688; or. 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. Post author By ; Post date western nebraska community college admissions western nebraska community college admissions These tobacco surcharges can be substantial, especially for older tobacco users, and they have increased over time. 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. Health Aff (Millwood). We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. Theoretically, surcharges could also lead to reduction in smoking by imposing a financial penalty for the behavior. More Mercer posts Tobacco surcharges and the state laws that limit them theoretically have varying effects on different segments of the health insurance market. Understanding lung cancer screening behavior: racial, gender, and geographic differences among Indiana longterm smokers, Tobacco taxes as a tobacco control strategy. Tobacco. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. Family Size The health insurance premiums of a family is determined based on every person in the family. Call KT, Davidson G, Sommers AS, Feldman R, Farseth P, Rockwood T. Uncovering the missing Medicaid cases and assessing their bias for estimates of the uninsured, The uninsured and the affordability of health insurance coverage: examining subgroups of uninsured Americans uncovers certain patterns of coverage gaps, but affordability remains a key concern, Response error and the Medicaid undercount in the current population survey, Tobacco product use among adultsUnited States, 20122013, Selfidentified tobacco use and harm perceptions among US youth, Individual Market Rate Restrictions (Not Applicable to HIPAA Eligible Individuals), Survey of NonGroup Health Insurance Enrollees, Health Insurance Exchanges 2020 Open Enrollment Report, Demand for health insurance marketplace plans was highly elastic in 20142015, Premium subsidies, the mandate, and Medicaid expansion: coverage effects of the Affordable Care Act, Demand for health insurance: evidence from the California and Washington ACA exchanges. 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