Effective January 1, 2021, the State of Montana Benefit Plan (State Plan) is implementing a Tobacco Surcharge for plan members who use nicotine. The surcharge will add $30 per month to the contribution amount for employees/retirees who use nicotine and/or $30 per month if the employee’s/retiree’s covered spouse/domestic partner uses nicotine. The Tobacco Surcharge will not apply to State Plan contributions until January 1, 2021.
The Health Insurance Portability and Accountability Act (HIPAA) allows employer plans to offer nicotine cessation programs that include a Tobacco Surcharge if the program complies with HIPAA’s requirements for wellness programs. Those requirements include limits on the amount of the tobacco surcharge, a program design that promotes good health and prevents disease, an opportunity to avoid the surcharge annually, and program availability to all similarly situated employees, with the right to satisfy a reasonable alternative standard if the employee is unable to stop smoking, vaping, or using tobacco/nicotine products. Because the State Plan program does not use medical tests to detect nicotine usage, the amount of the tobacco surcharge can be as much as 50% of the total cost of employee-only health coverage.
Tobacco and nicotine use significantly contribute to State Plan expenses by causing a variety of conditions, including cancer. For further data on how tobacco use increases cancer in Montana from DPHHS, please click HERE. You may also visit DPHHS's website HERE.
The Tobacco Surcharge is a separate surcharge and is not the same as the Live Life Well Incentive. In order to earn the Live Life Well Incentive, you must follow the instructions found at www.benefits.mt.gov/incentive and self-report your nicotine status at www.myactivehealth.com/som. If you want to avoid the Tobacco Surcharge, follow the directions below.
Nicotine: Nicotine is an addictive stimulant proven to have negative health effects that is found in cigarettes, cigars, chewing tobacco, and most vaping products.
- You are nicotine free if you have never used nicotine, have quit using nicotine, or infrequently use nicotine (less than 4x per month).
- You are nicotine free if you are currently using nicotine but HAVE completed an eligible alternative (nicotine cessation program or a nicotine counseling session with a medical provider) during the past 12 months.
- You are a nicotine user if you are currently using nicotine and HAVE NOT completed an eligible alternative (nicotine cessation program or a nicotine counseling session with a medical provider) during the past 12 months.
What Do I Do Now?
Current Plan Members
To avoid the Tobacco Surcharge, it is imperative for ALL employees/retirees to complete their benefit elections using the State Plan’s online enrollment system during this year’s Open Enrollment period from October 25 – November 7. Members will be asked to self-report nicotine use status as part of the benefits election process.
If a member does not complete their online benefit enrollment and self-report that they and/or their spouse/domestic partner is nicotine free, the employee/retiree and their covered spouse/domestic partner will be charged the nicotine surcharge. Remember, this is NOT the same as self-reporting nicotine use as part of the Live Life Well Incentive.
Look for additional instructions in early October 2020 included with the State Plan’s Open Enrollment materials and presentations.
New Plan Members
New employees enrolling on the State Plan beginning January 1, 2021, must self-report their nicotine use status as part of their Initial Enrollment event. If a new employee does not self-report nicotine use status as part of the Initial Enrollment event, the employee and their covered spouse/domestic partner being charged the Tobacco Surcharge.
Eligible Alternatives Available
If you use nicotine, you can avoid the Tobacco Surcharge if you complete and self-report one of the two eligible alternatives:
- Complete(d) a nicotine cessation program during the previous 12 months from the date of your enrollment event; OR
- Have a nicotine counseling session with a medical provider during the previous 12 months from the date of your enrollment event. This is a great alternative for plan members who are using nicotine replacement therapy (such as gum, patches, or lozenges).
Nicotine Cessation Programs
Learn more about no-cost nicotine cessation programs available to State Plan members.