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Tobacco Surcharge

A tobacco surcharge is an additional premium charge that health insurers can apply to people who use tobacco products. Under the ACA, insurers are allowed to charge tobacco users up to 50% more than non-tobacco users for the same plan — making it one of the few health-related factors that can legally affect your premium on an individual market plan.

A few important things to know:

  • The surcharge applies to cigarettes, cigars, chewing tobacco, and other tobacco products. E-cigarettes and vaping may or may not be included depending on the insurer and state.
  • Not all states allow the tobacco surcharge. Some states (including California, Massachusetts, New York, Vermont, and others) have prohibited it entirely.
  • Premium Tax Credits cannot be used to offset the tobacco surcharge — you pay it fully out-of-pocket even if you qualify for subsidies.
  • You self-report tobacco use when applying. Insurers may ask about frequency and recency of use.

If you’re working to quit, some plans offer tobacco cessation programs at no cost as part of preventive care benefits.

Frequently Asked Questions

How much extra will I pay for a tobacco surcharge?

Up to 50% more than the base premium for your plan, depending on your insurer and state. The exact surcharge varies by carrier. In states that permit it, you’ll see the surcharge listed separately when you get a quote. Because the surcharge can’t be offset by Premium Tax Credits, it represents a significant out-of-pocket cost increase for tobacco users who are subsidy-eligible.

Does the tobacco surcharge apply if I quit?

Once you’ve been tobacco-free for the period specified by your insurer (typically 6 months to 1 year), you can update your application and the surcharge should be removed at your next enrollment or plan renewal. Some insurers allow mid-year removal if you complete a cessation program. Check with your insurer or broker for the specific terms of your plan.

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