What is the Tobacco Surcharge?

The State of Montana Benefit Plan (State Plan) charges a Tobacco Surcharge for plan members who use nicotine.  The surcharge adds $30 per month to the contribution amount for members who use nicotine and/or $30 per month if the member’s covered spouse/domestic partner uses nicotine.  

How To Avoid the Tobacco Surcharge

The Tobacco Surcharge is a separate surcharge and is not avoided in the same way as the Live Life Well Incentive is earned.  Even if you've already self-reported nicotine use for the Live Life Well Incentive, you must still self-report during Open Enrollment to avoid the Tobacco Surcharge.  Self-reporting to earn the Live Life Well Incentive is NOT the same as self-reporting to avoid the Tobacco Surcharge.  To earn the Live Life Well Incentive, you must follow the instructions found at benefits.mt.gov/incentive. 

Current Plan Members 

To avoid the Tobacco Surcharge, it is imperative for ALL current plan members to complete their benefit elections using the State Plan’s online enrollment system during the Open Enrollment period.  Members will be asked to self-report nicotine use status as part of the annual benefit election process. 

If a member does not complete their online benefit elections and self-report that they and/or their spouse/domestic partner is nicotine free, the member and/or their covered spouse/domestic partner will be charged the nicotine surcharge.   Remember, this is NOT the same as self-reporting nicotine free as part of the Live Life Well Incentive.

If a member does not use nicotine and did NOT self-report during Open Enrollment, they are able to make their attestation mid-year.  Members who need to make their attestation mid-year must make their attestation online. 

• To make a mid-year tobacco surcharge attestation, members go to benefits.mt.gov and select “Existing Member Benefit Changes.”  
• Once signed in, select “Change my Benefits,” “Life Update,” and then “Tobacco Surcharge Update.” 
• When prompted, use the current day at the effective date. 
• The attestation of being nicotine free becomes effective going forward based on when a member makes their attestation.  The State Plan does not allow retroactive changes to tobacco attestations.  Employees will see the change within 2 payroll cycles.  Retirees and legislators will see the change on their next monthly invoice.  
• If a member has any trouble accessing the online self-attestation, they should call HCBD for assistance.

New Plan Members  

New employees enrolling on the State Plan must self-report their nicotine use status as part of their Initial Enrollment Event, as well as during subsequent Open Enrollment Periods.  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 will be 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 two eligible alternatives during Open Enrollment:

• 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

If the Surcharge has motivated you to quit, learn more about no-cost nicotine cessation programs available to State Plan members.

Definitions

Nicotine:  Nicotine is an addictive stimulant proven to have negative health effects that is found in cigarettes, cigars, chewing tobacco, and most vaping products.  

Nicotine Free

• You are nicotine free if you have never used nicotine, have quit using nicotine, use only FDA-approved Nicotine Replacement Therapy (NRT), 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.

Nicotine User

• 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. 

Why a Surcharge?

Tobacco and nicotine use significantly contributes to State Plan expenses by causing a variety of conditions, including cancer.  You can read further data about how tobacco use increases cancer in Montana from the Montana DPHHS.  You may also visit the Montana DPHHS's website. 

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 requirements. 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. The State Plan provides an exemption for religious/ceremonial use.  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.