Employees Can Avoid Tobacco Surcharge In SHOP Exchange If Also Enrolling In Tobacco Cessation Program

In a federally-facilitated SHOP exchange (FF-SHOP), an employee or dependent can avoid the tobacco premium rating surcharge at the time of initial enrollment (or re-enrollment) if they agree to participate in a wellness program meeting the standards of Public Health Service Act (PHSA) Sec. 2705, such as a tobacco cessation program, according to a recently released frequently asked questions from the Centers for Medicare and Medicaid Services (CMS).

However, an employee’s or employee’s dependent’s premium will be established for a period of one year upon enrollment, renewal, or reenrollment. Therefore, if an employee or dependent joins a Sec. 2705 wellness program mid-year, they will not be eligible for a premium reduction during the year. The employee or dependent will have an opportunity to avoid the tobacco premium surcharge upon renewal or reenrollment for subsequent coverage, the CMS noted.

For more information, visit https://www.regtap.info/uploads/library/SHOP_FAQ5_091313_5CR_091313.pdf.

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