Standard errors, clustered at the state level are shown in parentheses. 24 The ePub format is best viewed in the iBooks reader. If you would like to help our coverage grow, consider donating to Ballotpedia. affordable care act, enrollment, health insurance, marketplace, premiums, smoking, tobacco surcharge, Reasons for not enrolling in marketplace coverage. 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 . Health Aff (Millwood). First, there is known overreporting of nongroup health insurance plan participation among Medicaid eligible respondents in survey data including the CPS. The functionality is limited to basic scrolling. but it is unknown whether there are differential effects for smokers or those living in high surcharge states. Each column is a separate regression, and the interaction term between the percent surcharge and current smoker shows the key differenceindifference coefficient. In order to examine health insurance enrollment by tobacco use, we linked data from both CPSASEC and CPSTUS. 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. Employees are eligible for a discount/incentive at least once a year. Weston gives this example: Say, for instance, your health insurance benefits cost the company $1,000 a month. Second, due to Medicaid expansions, eligibility for marketplace subsidies and Medicaid overlaps between 100% and 138% FPL in some states, but not others. You do not have to pay this surcharge if you attest that: Neither you nor any of your enrolled dependents age 13 and older use . The practice of implementing a surcharge to recoup the costs of credit card processing fees was illegal across the country for several decades. 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. Other states like Kentucky, Arkansas, and Colorado allow a lower premium differential than federal law. Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. 5 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. 2 The interaction terms between surcharge state and current smoker show the key differenceindifference results. Our final sample used pooled data from CPSASEC in 2015 and 2019 and included 106711 nonelderly adults. 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. Kaplan CM, Kaplan EK. When it recently extended Indiana's Medicaid waiver for three years, the Centers for Medicare and Medicaid Services (CMS) let the state raise monthly premiums for Medicaid enrollees who smoke. 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. 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). Some states have set more restrictive limits on rating for tobacco use, and several states have outlawed tobacco premium surcharges altogether. 1 Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Benefits Insight. After calculating AGI, we excluded adults over 65 since they would likely be covered by Medicare. 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. 7 We linked data from two components of the Current Population Survey-the 2015 and 2019 Annual Social and Economic Supplement and the Tobacco Use Supplement, which we combined with data on marketplace plan premiums. 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. Another potential data limitation is that we only had complete, linked smoking and health insurance information for 2015 and 2019, which we pooled in our main analysis. Liber AC, Drope JM, Graetz I, Waters TM, Kaplan CM. government site. The plaintiffs are seeking a refund of all the tobacco surcharges collected by the employer since 2016. 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. Those on employer health plans can avoid the surcharge by joining an employer based tobacco cessation program. This report must include the name of each insurance carrier on behalf of which the TPA paid. Finally, in several specifications we excluded families with incomes less than 138% of the federal poverty level for the following two reasons. HHS Vulnerability Disclosure, Help 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. to reimburse all participants who paid the tobacco surcharge from July 1, 2011, to the present (plus interest), to revise its wellness program to comply with ERISA wellness incentive rules, to prevent Macys from collecting tobacco surcharges until it revises tis wellness program to comply with the ERISA rules, to empty all profits received as a result of its fiduciary breaches, and. Share & Print Documents & Downloads Issue Brief - States Vary on Higher Premiums Paid by Tobacco Users Under the ACA Related Tags Affordable Care Act 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. Our approach differs from the tripledifference approach used by Friedman et al, which used pre and postACA implementation as a third difference. Principal findings: Agents are available: Mon - Fri, 8 AM - 8 PM ET. Tech: Matt Latourelle Nathan Bingham Ryan Burch Kirsten Corrao Travis Eden Tate Kamish Margaret Kearney Joseph Sanchez. 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. However, our models adjusted for other state policies that may affect insurance enrollment and tobacco use. 2. Under the health reform law, private insurers can charge tobacco users no more than 50% more per month than who do not use tobacco. Since 2014, all nongroup health insurance plans, including those sold on the individual marketplaces, can only rate premiums based on four characteristics: age, family size, geographic region, and tobacco use. Box 200130 Helena, MT 59620-0130 Jun 28, 2013. 64C increased to $3.51 per pack. 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. and transmitted securely. September 29, 2021. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program. Under a law signed by Gov. Instead, the employer gave employees only two options: 1) dont use tobacco and avoid the surcharge; or. The Affordable Care Act brought dramatic changes to the individual and small group health insurance premiums still, the use of tobacco by a person can affect the price one pays for the health coverage. Conclusions: 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. Some states have set more restrictive limits on rating for tobacco use, and several states have outlawed tobacco premium surcharges altogether. 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. Bookshelf However, thanks to a class action lawsuit in 2013, a large number of states began permitting the practice . Best steps for trap avoidance: offer a reasonable alternative and notify employees of its availability. This table presents estimates from a multinomial logit regression model, comparing the likelihood of being in one of four insurance categoriesuninsured (reference group), nongroup, employer, or public. State fixed effects were included in columns (2) and (4) include state fixed effects; however, they did not substantially affect the results. Will the premium surcharges be split and collected from each paycheck? 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. We compared insurance enrollment in states that did and did not allow tobacco surcharges, using a difference-in-difference approach to compare the policy effects among smokers and nonsmokers. 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. Jay Inslee (D) on April 5, 2019, Washington's tobacco age restriction was set to increase from 18 to 21 on January 1, 2020. The survey included tobacco users age 1864 with incomes above. Each column is a separate regression, and the interaction term between surcharge state and current smoker shows the key differenceindifference coefficient. 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. Last updated January 6, 2022 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 2019 ASEC included variables that specifically identify marketplace coverage, so we examined whether the effect is driven by those with marketplace plans using the 2019 data only. 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. USA. Some states have made it illegal for insurance companies to implement a surcharge. Tom Wolf (D) on November 27, 2019, Pennsylvania's tobacco age restriction was set to increase from 18 to 21 on July 1, 2020. and nonsmokers who use tobacco may be less likely to consider themselves to be regular tobacco users. already built in. Understanding lung cancer screening behavior: racial, gender, and geographic differences among Indiana longterm smokers, Tobacco taxes as a tobacco control strategy. Our models test the effect of the surcharge on enrollment and do not provide evidence of higher enrollment among nonusers. to pay the costs the government incurred to bring the lawsuit against Macys. official website and that any information you provide is encrypted Overall, this study found that tobacco surcharges led to significantly lower enrollment in nongroup health insurance among smokers. Tobacco use is the largest cause of preventable illness in the United States. 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. Click here to contact our editorial staff, and click here to report an error. Even though we wont know the final outcomes of either case described above for a while, we can still draw lessons from these cases. The challenges and successes of each state's fight against tobacco use, and tobacco prevention efforts. State Specific Rating Variations. More Benefits Insight Cafeteria Plan COLA May Require . New York and Vermont are the two states where health insurance premiums are not based on age. CA, , 1865 into law. In states that allow tobacco surcharges, tobacco users pay substantially higher premiums for nongroup health insurance than nonusers. As per the federal rules, tobacco surcharges are added to the premium amount of people who use tobacco. Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P=.01). Duncan MS, Freiberg MS, Greevy RA, Kundu S, Vasan RS, Tindle HA. 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. Family Size The health insurance premiums of a family is determined based on every person in the family. Over 150000 emails were sent out to individuals who resided in the United States and were thought to be under 76years old. #1. 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. How Much Protected Are You After Being Vaccinated against COVID-19? See this image and copyright information in PMC. This site needs JavaScript to work properly. This finding was robust across a variety of specifications. 17 And in states like California, Rhode Island, Vermont, the District of Columbia, Massachusetts, New York, and New Jersey are not allowed to charge higher premiums from tobacco users. Smokers could find themselves burned by the Affordable Care Act. Data comes from a June 2019 online survey of tobacco users using Qualtrics Research Panel collected and analyzed by the authors. Reasons for not enrolling in marketplace coverage. Will every state implement a surcharge? 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. Although Freidman et al grouped states into small surcharge, large surcharge, and no surcharge categories, they did not explicitly model each policy component. 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. A $50 monthly tobacco surcharge will be applied to employees who declare tobacco usage. Smoking cessation programs that include tobacco surcharges need to comply with federal rules for workplace wellness programs. 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. By clicking "Submit", you agree to our Terms of Use and acknowledge our Privacy Policy. 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. 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). Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. In addition to the coefficients 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). Employers that are ALEs (i.e., have 50 or more full-time equivalent employees . 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). Additionally, among those facing a tobacco surcharge, a 10 percentage point increase in the size of the tobacco surcharge decreased the likelihood of enrollment in nongroup insurance by 8.6 percentage points (P=.02). 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. Because tobacco surcharges are changing over time, this specification also allowed us to include state fixed effects. The state lowered the age of majority, which also served as a tobacco age restriction at the time, from 21 to 19 in 1976. The ePub format uses eBook readers, which have several "ease of reading" features 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. Tobacco use is the largest cause of preventable illness in the United States. On May 20, 2019, Sen. Mitch McConnell (R) introduced a bill which would increase the tobacco age restriction to 21 at the federal level. Before Our contribution is particularly important to state policy makers because they may want to understand the comparative effectiveness of banning tobacco rating versus limiting the size of potential surcharges. 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. 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. This is due to a "tobacco surcharge". We first examined the impact of tobacco surcharges on the likelihood of having any type of health insurance. 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. Federal government websites often end in .gov or .mil. Our results were not sensitive to the use of the alternative definition of tobacco use including the use of other tobacco products. The table presents relative risk ratios from a differenceindifference specification similar to the one presented in Table2 and including all income levels. 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. 102. Gehr Family Center for Health Systems Science and Innovation, 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. The ACA requires that all health insurance plans provide tobacco cessation and lung cancer screening with no outofpocket costs. 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. Additionally, the elimination of the individual mandate has led to a decrease in enrollment, More specifically, our results show that tobacco surcharges have a large negative impact on enrollment in nongroup plans sold on the ACA marketplaces among those without insurance through an employer or public program. During the 1920s and 1930s, state laws trended towards a limit of 18 years. Study design: 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. , 2020;55:983992. The ACA's individual mandate in retrospect: what did it do, and where do we go from here? [11] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. 4 2022 Mar;41(3):398-405. doi: 10.1377/hlthaff.2021.01313. 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. Here are key things you need to know about tobacco surcharges and recent activity with lawsuits. Finally, we gathered data on tobacco surcharges from the CMS Health Insurance Exchange Public Use Files for 2015 and 2019. And in states like California, Rhode Island, Vermont, the District of Columbia, Massachusetts, New York, and New Jersey are not allowed to charge higher premiums from tobacco users. 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. Geographic Location The costs of health insurance premiums are not the same in every zip code, and vary from one area to another. State by State Tobacco Laws, Taxes, and Statistics. Descriptive statistics from linked CPSASEC and CPSTUS data pooled across 2015 and 2019. 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. 2 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. PMC 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. . the display of certain parts of an article in other eReaders. 2 In the CPSTUS, smoking status was defined based on how frequently individuals report smoking. Ten Democratic governors and eight Republican governors signed increases in tobacco age restrictions during this time.[3]. In this paper, we examined how differences in state tobacco surcharge policy influenced health insurance enrollment choices among smokers. , What is the amount of the tobacco surcharge? 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. Allowing tobacco surcharges at all and having larger tobacco surcharges were each associated with lower takeup of insurance. Alabama's tobacco age restriction had been above 18 since at least the 1960s. 14 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. 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). 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. She is also lead author of the book, Rule the Rules on Workplace Wellness Programs, published by the American Bar Association. 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). 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 attestation is the section of the enrollment process for the State Health Plan that asks a question about tobacco use. Thank you. 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. CarterHarris L, Slaven JE Jr, Monahan PO, SheddSteele R, Hanna N, Rawl SM. Click here to contact us for media inquiries, and please donate here to support our continued expansion. This option wouldn't change the amount of the federal premium tax credit, a move foreclosed by federal law. The surcharge is an extra charge on your health plan if you're a tobacco user or for those who don't partake, they may receive a discount. [13] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. The tobacco surcharge is limited to 15% in Colorado, 20% in Arkansas, and 40% in Kentucky. The lawsuits also teach us that wellness programs must not only offer a reasonable alternative standard but must make sure that anyone who completes that reasonable alternative standard qualifies for the entire reward for that plan year. 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). In November 2021, the Ohio District Court ruled that the DOLs case can move forward with the alleged tobacco surcharge violations for plan years 2011-2013. 2014 Aug;33(8):1466-73. doi: 10.1377/hlthaff.2013.1338. Health Serv Res. 17117 individuals opened the survey, and 1034 qualified for and completed the survey. You do not have to pay this surcharge if you attest (respond) that: You and all enrolled dependents ages 13 and older do not use tobacco products. 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. 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. They found that 16 percent of the 278 small employers used tobacco surcharges, yet 47 percent of those companies failed to offer tobacco cessation counseling. , It was increased from 18 to 21 in 1911. Health Aff (Millwood). Some of those states later passed a state law raising the state-level tobacco age restriction to 21. !function(){"use strict";window.addEventListener("message",(function(e){if(void 0!==e.data["datawrapper-height"]){var t=document.querySelectorAll("iframe");for(var a in e.data["datawrapper-height"])for(var r=0;r Hard Quiz Contestant Passed Away,
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