Benefits, HR News & Trends

New Obamacare Wrinkle: A Way For Smokers to Avoid Paying a Penalty

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The Obama administration on Tuesday effectively nullified a provision of the federal health law that would have allowed insurers in the small group market to charge smokers up to 50 percent more than nonsmokers.

Under the proposed regulation, employees who use tobacco can avoid paying those higher premiums if they participate in a program to quit. The regulation also allows states to eliminate higher rates for smokers altogether.

“This was the administration making lemonade out of lemons in the law,” said Erika Sward, assistant vice president at the American Lung Association, which had argued that charging smokers higher premiums would deter people from buying insurance without reducing smoking.

“We find carrots work better than sticks in helping people quit smoking,” Sward said.

Rule was likely to bother employers, insurers

Erin Reidy, associate director of policy at the American Cancer Society’s Cancer Action Network, also praised the rule, saying she hopes the administration applies it to people who buy their own insurance.

“The regulation encourages smokers to seek the help of proven services to help them quit by ensuring that smokers who enroll in tobacco cessation programs pay the same rates as nonsmokers,” she said.

But Lewis Maltby, president of the National Workrights Institute, a research and advocacy organization on employment issues, criticized the rule as “a dumb idea” that was likely to rankle employers and insurers.

“The penalty is kind of a joke if all you do is have to take a course and then can go back to smoking,” he said.

Even a smokers’ rights group gave the regulation mixed reviews.

“To hear there was a pullback of higher rates for smokers is welcome news,” said Audrey Silk, founder of New York City Citizens Lobbying Against Smoker Harassment. But she said smokers may object to having to take a class. “This is like forced behavior modification. It’s like blackmail.”

This article was reprinted from kaiserhealthnews.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.

Phil Galewitz covers Medicaid, Medicare, long‐term care, hospitals and various state health issues for Kaiser Health News. He has covered the health beat for nearly two decades, and before coming to KHN, he was at The Palm Beach Post and was a national health industry writer for the Associated Press and The Patriot‐ News in Harrisburg, Pa. Contact him at pgalewitz@kff.org.
  • Jacque Vilet

    You state:
    “But Lewis Maltby, president of the National Workrights Institute, a research and advocacy organization on employment issues, criticized the rule as “a dumb idea” that was likely to rankle employers and insurers. ‘The penalty is kind of a joke if all you do is have to take a course and then can go back to smoking,’ he said.”

    Separate from Obamacare, companies are using the same carrot. They are reducing employee paid medical premiums for people who sign up for a company wellness programs (including no smoking programs). Neither companies or HR pros see this as “negative”.
    The cynical can argue that employees will sign up/participate just to get the reduced premium but not follow through. Yes they might. Some people on welfare don’t deserve to be. Same for food stamps or unemployment. What’s the other option?
    Do we stop giving incentives for stop-smoking programs just because of those who might take advantage of the system? Do we assume that welfare, food stamp and unemployment are not worth providing because some will “scam” the system? There will always be loopholes for every law/regulation. Just look at Wall Street.
    If you see the incentive of offering a reward to those who are trying to stop smoking as a bad idea —- think again about it. Do you believe that using a stick is better than using a carrot?

  • John Bonert

    Meh, I wont be qutting and I wont be telling ANY government agent that I smoke (And lets face facts here folks, your doctor is now a government agent under obama care)

    I quit drugs some 8 years ago, I was always able to beat every drug test for years and years, you think I am scared of another control freak rule like this? lol

  • Susan Fine

    Uhhh, the government has no business using carrots or sticks to do ANYTHING for people. I also smoke and lie about it, It is estimated a good 60% of people do the same thing, and Obummer Care isnt going to change that.

    • http://www.facebook.com/roberta.welch.5 Roberta Welch

      Obama is such a hypocrite he smokes but because him and all his cronies are in the government they can smoke and we still pay their medical

  • Trixie

    Supposing you just say…No, I no longer smoke. Who’s to say you haven’t quit? Will there be perjury issues in Obamacare?

    • http://www.facebook.com/gail.russell.940 Gail Russell

      Will there be blood tests?

      • Magnatron Wondercricket

        Yes. An acceptable policy under Obamacare requires annual drug and nicotine tests.