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For Ohio Employers: Affordable Care Act and Tobacco Cessation

Tobacco cessation coverage is the single most cost-effective health benefit an employer can provide to its employees. The return on investment to employers is positive in the first year due to productivity gains and provides positive medical cost savings in the second year. Smoking and smoking-related illnesses cost employers $2,312 per smoking employee in lost productivity and $2,132 per employee in excess medical expenses.

The federal Patient Protection and Affordable Care Act (PPACA) includes tobacco coverage provisions that will ultimately affect all employers in Ohio. This document addresses coverage requirements for employers who offer either insured or self-insured health benefits to their employees.

For plan years beginning on or after September 23, 2010, employers must offer their employees tobacco cessation benefits with no cost sharing requirements. This applies to both insured and self-insured employers; only grandfathered employers are exempt.

What to Cover: Baseline Benefit

Federal agencies and the Ohio Department of Insurance will consider a group health plan or health insurance issuer to be in compliance with the requirement to cover tobacco use counseling and interventions if the plan or issuer covers without cost-sharing:

  • Screening for tobacco use; and,
  • For those who use tobacco products, at least two tobacco cessation attempts per year. For this purpose, covering a cessation attempt includes coverage for:
    • Four tobacco cessation counseling sessions of at least 10 minutes each (including telephone counseling, group counseling and individual counseling) without prior authorization; and 
    • All Food and Drug Administration (FDA)-approved tobacco cessation medications (including both prescription and over-the-counter medications) for a 90-day treatment regimen when prescribed by a health care provider without prior authorization.

Other than federal mandates, why provide tobacco cessation coverage to employees?

If cessation benefits are structured well, an employer should generate a positive return on investment early in the second year of providing the benefit. As such, if an employer is paying for coverage due to the reform requirements or has decided to for strategic reasons, it makes sense to structure the benefit to maximize the economic return. The baseline benefit description above reflects coverage that is in compliance with PPACA and is likely to maximize the odds of a successful quit attempt and a fast return on investment for the employer.

Three Options for Coverage and How to Assess Effectiveness

1. If you work with a health plan or an Administrative Services Only (ASO) partner, determine if it has a plan-sponsored tobacco benefit or rider. As you evaluate this coverage, consider:

  • Level of coverage: Does it provide the baseline benefits described above?
  • Price:
    • Does the price provide good value to the employer in terms of utilization and cost?
    • Consider use-based pricing which incents the vendor to actively promote the benefit and minimizes the employer’s risk to just those who attempt to quit.
    • If it is priced on a per member per month (pmpm) basis -- how does the plan promote the benefit and what kind of utilization has been historically achieved? If not actively promoted and tracked, the outlay can be very high relative to the number of people who use the benefit. 
  • Outcomes: Can the plan report the percentage of eligible employees that are participating in the cessation program and an externally validated 6-month or 1-year quit rate? If not, how can the employer ensure value for the money expended?

2. Consider the public-private partnership Ohio Tobacco Collaborative as part of your benefit. Ohio has a unique public-private partnership (the Ohio Tobacco Collaborative) that leverages the buying power of employers, health plans, the Ohio Quit Line and the Ohio Department of Health. Through it, purchasers, health plans and other entities can access nicotine replacement therapy (NRT) at cost and greatly discounted telephonic counseling services.

  • Quit Line telephonic coaching - $168 per member who calls the Quit Line, for five outbound coaching sessions and unlimited support calls.
  • Nicotine Replacement Therapy (NRT) - $54 for four weeks of patch(21mg, 14 mg, or 7mg), or $60 for four weeks of gum (2mg or 4mg), or $64 for four weeks of lozenges (2mg or 4mg) shipped to the participant's home.

The Ohio Tobacco Quit Line, run by National Jewish Health, reports six-month quit rates of 40 percent for Ohio participants. Although priced on a per use basis, the rates negotiated translate to approximately .20 pmpm. Because it provides access to the nationally recognized 1-800-Quit-Now phone number, it is easy for both employees and providers to use, with minimal implementation required. If you’re interested in the Ohio Tobacco Collaborative, please email tobaccoprevention@odh.ohio.gov for more information.

3. Consider an independent contractual relationship with a cessation vendor. There are other cessation vendors that take a variety of different approaches to cessation services for private health plans, employers and other state quit lines. Any vendor analysis should include the three factors identified above: level of coverage, price, and validated outcomes data.

 

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Last Updated: 5/23/2017