tobacco surcharge rules by state

Click here to contact us for media inquiries, and please donate here to support our continued expansion. 13 [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. In order to examine health insurance enrollment by tobacco use, we linked data from both CPSASEC and CPSTUS. 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 . This suggests that smokers living in nonsurcharge states might be more likely to have employer sponsored health insurance than smokers living in states that allow tobacco surcharges. By 1920, 46 states had implemented an age limit for tobacco sales, of which 14 set the limit at 21. Massachusetts has many laws that govern tobacco: Tobacco excise taxes. Under the health reform law, private insurers can charge tobacco users no more than 50% more per month than who do not use tobacco. During the 1920s and 1930s, state laws trended towards a limit of 18 years. Consent for marketing calls Each column is a separate regression, and the interaction term between the percent surcharge and current smoker shows the key differenceindifference coefficient. 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. phone or text message using an automatic telephone dialing system. Click here to contact our editorial staff, and click here to report an error. 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. Indiana claims this policy will test whether a premium surcharge will convince smokers to quit, but evidence shows that, instead, it will likely reduce the number of people who sign up for coverage . tobacco surcharge rules by state. This paper contributes to a small existing literature on the impact of tobacco surcharge laws on health insurance enrollment. Please email us if you would like to suggest a revision. See this image and copyright information in PMC. [7][8] The tobacco age restriction remained at 19 until federal law raised it to 21 in December 2019. Smoking cessation programs that include tobacco surcharges need to comply with federal rules for workplace wellness programs. Despite ACA lawmakers strong feeling that an individuals health condition should not be taken into consideration when setting the health insurance premiums, still they allowed health insurers to charge higher premiums from the tobacco users. This tax applies to cigars, snuff, chewing tobacco, and any other tobacco product except for cigarettes. Tobacco use is the largest cause of preventable disease and death in the United States, Liber AC, Hockenberry JM, Gaydos LM, Lipscomb J. 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. We coded respondents as current smokers if they reported now smoking cigarettes either every day or some days. This definition is slightly different from the definition used to apply the tobacco surcharge, which is the use of tobacco products four or more times, on average, per week within the past six months. We used the narrower definition, considering only cigarette smokers because cigarette smokers make up most of the population of every day tobacco users The University of Southern California Institutional Review Board approved the survey data collection and deemed the analysis of data from the CPS as exempt from full review, and the relevant part of the survey questionnaire is included in Appendix S2. Even though we wont know the final outcomes of either case described above for a while, we can still draw lessons from these cases. In plan years 2011 and 2012, the program failed to offer employees a reasonable alternative standard and notice of that reasonable alternative standard. Evidence that tobacco surcharges lead to lower takeup of marketplace plans is further bolstered by results from a separate survey of tobacco users. 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. but it is unknown whether there are differential effects for smokers or those living in high surcharge states. John Lehman. Reasons for not enrolling in marketplace coverage. We used linear probability models with a differenceindifference specification. In other words, a vaccine-related surcharge will have the effect of making coverage less affordable by ACA standards. 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. This table presents estimates from a differenceindifference linear probability model, examining the likelihood of the outcome of interest for smokers in surcharge states. Finally, in several specifications we excluded families with incomes less than 138% of the federal poverty level for the following two reasons. marketing partners; and (ii) [InsureMeNow] and marketing partners may contact you with Operations: Meghann Olshefski Mandy Morris Kelly Rindfleisch If the program imposes a tobacco surcharge based on whether participants smoke (or otherwise use tobacco), participants who request an alternative standard must be offered a reasonable one,. Age The health insurance premiums are based on an individuals age, as older people are charged higher premiums compared to younger people. Thank you. Ten Democratic governors and eight Republican governors signed increases in tobacco age restrictions during this time.[3]. Tobacco use is the largest cause of preventable illness in the United States. Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. Figure1 shows the results from our survey of uninsured tobacco users with incomes above 138% FPL. 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. 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. 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.. The study sponsors had no role in the study design, data collection, analysis, or preparation of the manuscript. Standard errors, clustered at the state level are shown in parentheses. [2] After June 2015, eighteen other states raised their tobacco age restriction to 21. Come Jan. 1, smoking is one of the few allowable factors . Research: Josh Altic Table TableA3:A3: AppendixS1 presents results excluding individuals under 26 and classifying tobacco use as the use of any tobacco product rather than cigarettes only. 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. 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. Column 3 repeats the specification from column 2 and confirms that the relationship is stronger among this population. 54:40A-4.1 Keck School of Medicine, These tobacco surcharges can be substantial, especially for older tobacco users, and they have increased over time. , 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 . Here are key things you need to know about tobacco surcharges and recent activity with lawsuits. Disclaimer, National Library of Medicine Albeit if a person with an average premium is subjected to a 50% tobacco surcharge, then their monthly premium would increase to $864 per month, and their premium subsidy would not change. The survey included tobacco users age 1864 with incomes above 138% FPL who reported being uninsured or insured through a marketplace plan. Tobacco surcharges and the state laws that limit them theoretically have varying effects on different segments of the health insurance market. The ePub format is best viewed in the iBooks reader. The cigar and smoking tobacco excise imposed by M.G.L. It is important to know that premiums are added for up to three children under the age of 21, so a family having five children under the age of 21 will pay the same premium as a family having three children under the age of 21-year. [12] Under a law signed by Gov. The tobacco age restriction across the country is 21 as a matter of federal law. Results showing the impact of the size of tobacco surcharges are presented in Table4. We found that the tobacco surcharge rate averaged approximately 14 percent and that it was associated with lower total enrollment as well as a reduced share of total enrollees who reported any tobacco use. In order to focus on health insurance coverage among individuals most likely to be affected by tobacco surcharges, we made several sample exclusions. 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. The tobacco cessation wellness program is designed to promote health and prevent disease. 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. 7 Learn 4 tips for making your tobacco cessation program more successful. 8 The site is secure. 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 State Health Plan members (employee only) must complete the tobacco attestation in order to eliminate the default surcharge of $60 a month for 2023. . Tobacco attestation is the section of the enrollment process for the State Health Plan that asks a question about tobacco use. Thus, a family of five will pay a higher monthly premium compared to a family of three. Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P=.01). Standard errors, clustered at the state level are shown in parentheses. to not pay the monthly surcharge) for 2023. The .gov means its official. 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. Ballotpedia features 393,617 encyclopedic articles written and curated by our professional staff of editors, writers, and researchers. Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program. Tobacco surcharges and the state laws that limit them theoretically have varying effects on different segments of the health insurance market. 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). The ePub format uses eBook readers, which have several "ease of reading" features 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. Although federal regulations require that plans charge tobacco users no more than 50% higher premiums, several states have more strict regulations. 27 Standard errors, clustered at the state level are shown in parentheses. Abbreviations: AGI, Adjusted Gross Income; FPL, Federal Poverty Level; HIU, Health Insurance Unit; SD, standard deviation. Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P = .01). Second, due to Medicaid expansions, eligibility for marketplace subsidies and Medicaid overlaps between 100% and 138% FPL in some states, but not others. Policy: Christopher Nelson Caitlin Styrsky Molly Byrne Katharine Frey Jimmy McAllister Samuel Postell Our results are consistent with previous evidence that surcharges reduce enrollment as well as broader evidence that potential enrollees in nongroup insurance are highly price sensitive. Our approach differs from the tripledifference approach used by Friedman et al, which used pre and postACA implementation as a third difference. 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). This blog post is for informational and educational purposes only. , As of July 1, 2013, the excise tax imposed on cigarettes under M.G.L. 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. Under a law signed by Gov. 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 states health insurance exchange (Access Health CT). While in most states a tobacco surcharge is permitted, the rules have become quite complex. September 29, 2021. The state Legislature included the surcharge requirement in the state budget signed into law on June 30, 2013. Nearly Half Of Small Employers Using Tobacco Surcharges Do Not Provide Tobacco Cessation Wellness Programs. Kaplan CM, Kaplan EK. 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. 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. 102. 8 As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. 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. Employees that satisfy a reasonable alternative standard specified by the City shall not be subject to the 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 tobaccorelated disease. This allows us to account for whether the effect is concentrated in the nongroup market or whether there are spillover effects. 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. Jay Inslee (D) on April 5, 2019, Washington's tobacco age restriction was set to increase from 18 to 21 on January 1, 2020. PROOF OF AGE MAY BE REQUIRED FOR PURCHASE. 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. marketing materials using the information you provide. Because tobacco surcharges are changing over time, this specification also allowed us to include state fixed effects. 10.1111/1475-6773.13577 FPL=Federal Poverty Level. These limits may not be binding in all cases, as many plans charge less than the maximum allowed, and there is substantial geographic variation in the amount of the sucharge. Among other requirements, in order for a tobacco surcharge to be permissible, the employer must offer a reasonable alternative to obtaining the reduced premium. 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. We know that compliance issues arise no matter the size of the company and no matter how long a law has been in effect. It is now looking at a state-by-state approach to work on rolling back . 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. The practice of implementing a surcharge to recoup the costs of credit card processing fees was illegal across the country for several decades.

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