Employee health plans charge smokers extra but employers don't help them quit
Almost half of small employers that charge tobacco users extra for their health insurance don’t offer wellness programs to help employees stop smoking, according to a recent study.
The Affordable Care Act permits these surcharges only when employers provide a wellness program, yet more than one million employees in the U.S. work for a company that is noncompliant, researchers estimate in the journal Health Affairs.
“If tobacco users are charged more for health insurance, they should be provided with access to resources to quit,” said lead author Michael Pesko, a health economist at Georgia State University in Atlanta.
The ACA allows employer plans in the small-group marketplace to charge tobacco users up to 50 percent more for premiums, but only if the employer offers a tobacco cessation program and the employee chooses not to participate, the study team writes. Seven states - California, Connecticut, Massachusetts, New Jersey, New York, Rhode Island and Vermont - prohibit tobacco use surcharges under any circumstances.
“Tobacco use surcharges can help offset higher health care costs for tobacco users,” Pesko said in an email. But studies don’t show whether tobacco surcharges are effective as a financial incentive for employees to stop smoking.
The researchers used 2016 survey data collected by the Henry J. Kaiser Family Foundation and the Health Research and Educational Trust for 278 employers in the Small Business Health Options Program.
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. In addition, 14 percent used surcharges in states that completely prohibit them.
The study team estimates that in states where surcharges are allowed, 950,712 employees work for a company imposing the charges without an accompanying wellness program, and of these, 155,917 smokers would be affected. An additional 118,229 employees, including 13,242 smokers, worked for such companies in states where the surcharges are not even allowed.
Overall, 37 percent of employers had tobacco cessation programs, which were most common in health care jobs. Noncompliance in the service industry in particular affected more employees than all industries combined, the researchers note.
“It is unclear why these noncompliant health insurance plans are being sold,” Pesko said. “We recommend that regulators enforce existing ACA regulations to prevent the sale of plans using tobacco surcharges without providing tobacco cessation wellness program access.”
“We don’t think tobacco surcharges are a good way to reduce smoking. It can either lead to lower enrollment for tobacco users, who are a high-risk health population, or noncompliance in reporting,” said Cameron Kaplan of the University of Tennessee Health Science Center in Memphis, who wasn’t involved in the study.
From a policy perspective, researchers want to look to states to figure out what authority exists to protect tobacco users from being taken advantage of in the meantime, if the complex system of regulations, surcharges and workplace wellness programs is flawed, said Alex Liber of the American Cancer Society in Atlanta.
“While tobacco users can be charged higher premiums by their employers, they are entitled to programs that will help them quit smoking at the same time,” Liber, who also wasn’t involved in the study, said in an email.
“It is truly unfair that employers are violating federal regulations that say they are supposed to offer carrots in addition to the sticks of higher premiums,” Liber added.
