To meet legal requirements and realize savings in healthcare premiums and employee productivity, the implementation of smoking surcharges should be paired with a robust smoking cessation program.

Since 2014 the Affordable Care Act has permitted employers and insurance companies to charge tobacco users up to 50% more in premiums. States, however, can set their own rules to reduce or eliminate that surcharge and so far at least 10 have done so, including most notably California, where the permissible surcharge has been cut to to zero. The Health Insurance Portability and Accountability Act, meanwhile, requires that smokers be offered the opportunity to meet “a reasonable alternative standard” in order to get a pass on higher contribution levels.

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