Tobacco User Premium Differential Deductions

Background

Senate Bill 1664, 82nd Legislature, Regular Session, established authority for the Employees Retirement System of Texas (ERS) to offer tobacco users in the group benefits program coverage for prescription drugs to help them quit tobacco use.

It also authorizes charging higher premiums for people who continue to use tobacco, beginning Jan. 1, 2012. ERS established a coverage review period when covered employees and their covered dependents who use tobacco had to certify the tobacco use. Based on the certification of tobacco use, a new tobacco user premium differential deduction began on Jan. 1, 2012, for certain employees.

Employee Responsibilities

Employees who either use tobacco products or whose covered dependents (spouses and children) use tobacco products must certify that use via the ERS website. Once the certification is made, ERS assesses a tobacco user premium differential to be deducted from payroll in the same manner as the employee-paid insurance premiums.

If an employee or his or her dependents successfully stop using tobacco, the employee can notify ERS and the tobacco user premium differential will be changed.

State Agency Responsibilities

State agency staff should ensure employees are aware of the tobacco cessation programs available to them. Employees should also be aware they are required to certify tobacco use for themselves and their dependents.

State agency staff must ensure the tobacco user premium differential is deducted from employees’ net pay when applicable. State agency staff members can help employees with self-reporting but are not required to independently report another employee’s tobacco use.

Comptroller’s Office Responsibilities

Comptroller’s office staff helps state agencies resolve questions about how the deduction is withheld by the payroll systems.

Sources

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