All regressions are weighted using the appropriate weights from the Current Population Survey. 7 The program may include a tobacco surcharge to help motivate employees. 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. This surcharge is considered a tax-sheltered amount for payroll. PMID: 35254928 DOI: 10 . Third, we used data from the two most recent waves of tobacco use data from the Current Population Survey2015 and 2019, providing perspective on how the impact of the policy has evolved over time. 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. Health Serv Res. 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. However, if banning surcharges is not feasible, policy makers might consider limiting surcharges to below the 50% federal cap. 1 [13] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. Our approach differs from the tripledifference approach used by Friedman et al, which used pre and postACA implementation as a third difference. See this image and copyright information in PMC. Will every state implement a surcharge? Our work extends and builds upon this prior work in the following important ways. , , **Please Note: Nothing contained in this blog post is to be construed as legal advice. Federal government websites often end in .gov or .mil. Help expand Ballotpedia's elections coverage - volunteer with us. Each column is a separate regression, and the interaction term between the percent surcharge and current smoker shows the key differenceindifference coefficient. During the 1920s and 1930s, state laws trended towards a limit of 18 years. First, there is known overreporting of nongroup health insurance plan participation among Medicaid eligible respondents in survey data including the CPS. By clicking "Submit", you agree to our Terms of Use and acknowledge our Privacy Policy. 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. It has been more than a century since Utah's tobacco age restriction was last 18. 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. The plaintiffs are seeking a refund of all the tobacco surcharges collected by the employer since 2016. 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. 10.1111/1475-6773.13577 Last updated January 6, 2022 The employer determined tobacco use status through an affidavit completed by each employee covered under the employer group health plan. These people are also less likely to receive timely medical treatment at the time when they will need it. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers. 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. The survey included tobacco users age 1864 with incomes above. 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). Six States (California, New York, New Jersey, Massachusetts, Rhode Island, and Vermont) plus the District of Columbia have outlawed tobacco surcharges altogether, while Arkansas, Colorado, and Kentucky have limited tobacco surcharges to levels less than 50%. Cameron M. Kaplan, PhD and Erin K. Kaplan, PhD. [14] However, the state's tobacco age restriction was raised to 21 in December 2019 by federal law. The tobacco surcharge only applies to UAB employees. Evidence that tobacco surcharges lead to lower takeup of marketplace plans is further bolstered by results from a separate survey of tobacco users. Allowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P=.01). 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. These tobacco surcharges can be substantial, especially for older tobacco users, and they have increased over time. Banning tobacco surcharges may be more effective than having a very low tobacco surcharge, since even asking about tobacco use during enrollment could have an effect on enrollment independent of the size of the surcharge. State Specific Rating Variations. Because tobacco surcharges are changing over time, this specification also allowed us to include state fixed effects. 7 and transmitted securely. 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. The tobacco age restriction across the country is 21 as a matter of federal law. 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. Current federal law allows health insurance plans and companies to charge tobacco users an additional 20%. Bethesda, MD 20894, Web Policies 17 -N.J. Stat. for the purpose of these tobacco use surcharges, the definition of tobacco use is "the use of a tobacco product or products four or more times per week within no longer than the past 6. For more information about legal considerations with tobacco surcharges, please connect with me atCenter for Health and Wellness Law, LLC. Smokers living in states with high tobacco surcharges are less likely to have health insurance. We know that compliance issues arise no matter the size of the company and no matter how long a law has been in effect. 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 nationwide average pre-subsidy premium in 2020 is about $576 per month for health plans sold in the exchange. See details about the 5-factor test in my previous blog post, What Is a Tobacco Surcharge and How Does My Company Offer One? Abbreviations: AGI, Adjusted Gross Income; FPL, Federal Poverty Level; HIU, Health Insurance Unit; SD, standard deviation. Some states have made it illegal for insurance companies to implement a surcharge. 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. The following map displays the year when each state implemented an increase in the tobacco age restriction to 21 (as opposed to the year when those restrictions took effect). In plan years 2011 and 2012, the program failed to offer employees a reasonable alternative standard and notice of that reasonable alternative standard. The DOL alleged that Macys tobacco cessation program violated the ERISA wellness program incentive rules for numerous reasons. FOIA Tobacco attestation is the section of the enrollment process for the State Health Plan that asks a question about tobacco use. 8 Most states, however, follow the federal law and allow insurers to impose tobacco surcharges of up to 50% but employer wellness programs must follow certain rules for those surcharges to be legal. 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. Mokdad AH, Marks JS, Stroup DF, Gerberding JL. In order to aggregate surcharge data to the state level, we first computed the median surcharge in each marketplace rating area by calculating the ratio between the plan premiums offered to tobacco and nontobacco users for a 45years old. Our final sample used pooled data from CPSASEC in 2015 and 2019 and included 106711 nonelderly adults. 2020;55:983992. 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. Thus, it can be said that employers can charge higher premiums from employees using tobacco but they also have to offer a tobacco cessation program, so that employees have the option to avoid the surcharge by participating in the tobacco cessation program. 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. marketing materials using the information you provide. Figure1 shows the results from our survey of uninsured tobacco users with incomes above 138% FPL. Tobacco Surcharges - Legal Rules Descriptive statistics from linked CPSASEC and CPSTUS data pooled across 2015 and 2019. Other states like Kentucky, Arkansas, and Colorado allow a lower premium differential than federal law. 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