Q&A: Tobacco Use Incentives and Penalties
Organizations have always been talking about tobacco, but the conversation amplified when federal rules were put in place. Since then we’ve received a lot of questions surrounding tobacco cessation, incentives, and penalties. While we recommend that you always consult your company’s compliance and legal teams, here are some answers to the most frequently asked questions:
Q: Is tobacco cessation a requirement?
A: This is a big question and the answer is, it depends! For employer-sponsored insurance plans created after March 2010 (non-grandfathered), individuals who receive health insurance through their employer are required to offer tobacco cessation as a preventive service. There are specific federal guidelines that define this. (RESOURCE)
Q: What is Blue Cross and Blue Shield of North Carolina (Blue Cross NC) doing about tobacco cessation?
A: Blue Cross NC partners with QuitlineNC to help your employees quit tobacco for good. Spanish-speaking quit coaches are also available. Visit their website for more information or have your employees call 1-844-8NCQUIT to talk to a Quit Coach.
Q: If I want to implement an incentive or penalty or tobacco cessation, how do I do it?
A: First things first: Whatever incentive or penalty you decide to put in place needs to follow federal guidelines. In January 2014, federal rules were put into place that allows employers to incentivize employees or penalize them up to 50% of the cost of coverage for tobacco use. The first step in implementing an incentive or penalty is creating a policy. Your policy needs to address both the frequency and type of tobacco use so employees are clear about what constitutes “tobacco use”. For example, “Tobacco use constitutes the use of any of the following four or more times per week: cigarettes, cigars, chewing tobacco, pipe smoking, hookah smoking, electronic cigarettes, snuff, dip, and vaporizers.” [i]
Q: How do I know if my employees are tobacco users?
A: To issue incentives or penalties, you need to know if employees are using tobacco. This can be done by 1) a blood test that can detect the presence of nicotine, or 2) creating a signed affidavit where employees disclose their tobacco status.[ii]
Q: Where can I find sample affidavits?
A: Likely on your internet homepage–Google! You can find tons of examples of tobacco-use affidavits online. Remember that it is critical to consult your legal counsel when creating this document so it can be reviewed and revised as needed.
Q: According to the laws, I have to provide an alternate standard. How do I do it?
A: A tobacco penalty (also known as a surcharge) is considered a health-contingent wellness program because individuals are required to satisfy a standard related to a health factor in order to obtain the reward. Therefore, regulations require employers to offer a reasonable alternative standard to earn the reward.[iii] A great example of an alternate standard is the Blue Cross NC partnership with QuitlineNC. Through QuitlineNC, employees can speak with a certified quit coach and use the recommendations provided to create a plan to quit. Once an employee completes the requirement for the alternate standard, he or she can receive the incentive. If an employee who uses tobacco chooses not to participate, he or she will be assessed a surcharge.[iv]