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Texas Payroll/Personnel Resource

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Tobacco User Premium Differential Deductions
Information About the Deduction and Additional Resourcess

Information About the Deduction

The tobacco user premium differential deduction is a pre-tax deduction and is included in the “all-or-nothing” rule that applies to insurance deductions.

The all-or-nothing rule states that if there is not sufficient net pay to deduct the entire employee portion of the insurance premium, then none is deducted and the employee must pay ERS directly. The tobacco user premium differential deduction only applies when the employee has a health insurance deduction, so it is not applied during the 90-day benefits waiting period and is not applicable when an employee has chosen to opt out of health insurance.

There are seven levels of coverage for the tobacco user premium differential deduction, determined by the identity of the tobacco user:

  • Member Only – Only the covered employee uses tobacco products. The additional deduction is $30 per month.
  • Member and Spouse – The covered employee and spouse both use tobacco products. The additional deduction is $60 per month.
  • Member and Child – The covered employee and any covered child or children use tobacco products but the spouse does not. It does not matter how many covered children use tobacco products. The additional deduction is $60 per month.
  • Member and Family – The covered employee and covered dependents (spouse and at least one child) use tobacco products. The additional deduction is $90 per month.
  • Spouse Only – Only the covered spouse uses tobacco. The additional deduction is $30 per month.
  • Child Only – At least one of the covered children uses tobacco products. The additional deduction is $30 per month.
  • Spouse and Child Only – The covered employee does not use tobacco products, but the covered spouse and at least one covered child uses tobacco. The additional deduction is $60 per month.

Additional Resources

For more information about the tobacco user premium differential, see Tobacco Policy on the ERS website.

Sources

Employees Retirement System of Texas Tobacco Policy; Texas Insurance Code, Chapter 1551, Section 1551.3075.