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Tag: smoking

I smoke but I’m trying to quit. What happens if I don’t disclose to an insurance company that I use tobacco?

If you report inaccurate or false information about your tobacco use on an application, an insurer is allowed to retroactively impose the tobacco surcharge to the beginning of the plan year. However, the insurer is not allowed to cancel your coverage because of the false or incorrect information.

The tobacco surcharge makes my health insurance unaffordable so I can’t buy coverage. Even after taking into account the tax credit, my premium will cost more than 8.16 percent of my income. Will I owe a penalty?

No. If the cost of health insurance, taking into account both your premium tax credit and the tobacco surcharge, exceeds 8.16 percent of your income in 2017, you will not be subject to the penalty for failure to obtain insurance that year.

My income is less than 400% of the FPL and I smoke. Will the tobacco surcharge to the premium be covered by my premium tax credit?

No. A tobacco surcharge is not covered by the health insurance premium tax credits. The premium tax credit will reduce what you have to pay for the regular health insurance premium, but you will have to pay the entire additional tobacco surcharge. For example, if the regular premium for a policy is $200 per month and you qualify for a premium tax credit of $75 but you also use tobacco and so would be subject to a 50% tobacco use surcharge, you would have to pay $225 for that policy ($200 for the regular premium minus $75 for your premium tax credit plus $100 for the tobacco surcharge.)

What does it mean to “use tobacco?” I’m pretty sure my teenager has smoked at least a couple of times. Do I have to pay a higher rate because of her?

“Tobacco use” means a person has used a tobacco product an average or four or more times per week for the past six months. A state can increase the number of times per week or reduce the “look-back” period to less than six months. Check with your state Marketplace to learn more about tobacco surcharges and how they work.

The surcharge on tobacco users can only be applied to an individual who can legally purchase a tobacco product in the state. Thus, the surcharge does not generally apply to a person under age 18.

Can I be charged higher premiums in the Marketplace if I smoke?

In most states, yes. Generally, an insurer can charge as much as 50% more for a person who uses tobacco products. For example, if the premium for somebody your age (before any tax credits are applied) would otherwise be $200 per month, if you are a tobacco user your premium could be increased to $300 per month. States can prohibit insurers from applying a tobacco surcharge or further limit the tobacco penalty and some have done so. (For example, California, Massachusetts, Rhode Island, Vermont and the District of Columbia prohibit tobacco rating for their Marketplace plans.] Also, some insurers who do charge more for tobacco users are charging the less than maximum amount they can under the law. Check with your state Marketplace to learn more about tobacco surcharges and how they work.

If you qualify for premium tax credits to reduce the cost of Marketplace coverage, this tax credit amount will be based on the premium before the tobacco surcharge is applied, which means that a smoker must pay the full cost of the surcharge.

I smoke cigarettes and I buy my own health insurance. Can I be charged more because I smoke?

Yes, in most states you can. Insurers are allowed to increase premiums by up to 50% more for people who use tobacco, although many insurers apply a lower surcharge for tobacco use. If you qualify for premium tax credits, this tobacco surcharge will not be covered by the tax credit. States are allowed to limit tobacco surcharges and a few have decided to prohibit tobacco rating by health insurers.