TOBACCO & SMOKER SURCHARGES

You may have paid more for health insurance than the law allows.

Many employers charge employees extra for health insurance if they use tobacco. These charges are often called tobacco surcharges, smoker’s surcharges, or wellness program penalties.

Under federal law, employers and health plans cannot simply charge higher premiums based on tobacco use unless they follow strict rules. When they fail to follow those rules, employees may be entitled to money back.

Contact us to find out if you qualify to receive compensation.

Depending on the facts, affected employees may be able to seek:

• Refunds of improperly charged tobacco surcharges.
• Reimbursement for amounts paid during the plan year.
• Other relief available under federal employee benefits law.
• The amount may depend on how much you paid, how long you paid it, and whether your employer followed the wellness program rules.

Tobacco Surcharge Explained

A tobacco surcharge is an extra amount added to an employee’s health insurance premium because the employee uses tobacco.

These surcharges can be significant. Employees may pay hundreds of dollars more per year for health insurance coverage.

Employers often include these charges as part of a workplace “wellness program.” But wellness programs must comply with federal rules.

When a Tobacco Surcharge May Be Illegal

A tobacco surcharge may violate the law if your employer or health plan failed to follow the required rules.

Federal law generally prohibits health plans from charging employees different premiums based on a health factor, including tobacco use.

There is an exception for certain wellness programs, but only if the program gives tobacco users a fair chance to avoid the surcharge. That usually means the employer must offer a reasonable alternative, such as completing a tobacco cessation program.

• You paid extra for health insurance because of tobacco use.
• You were told you had to pay a smoker’s or tobacco surcharge.
• You were not clearly told how to avoid the surcharge.
• You completed a tobacco cessation program but did not receive a full refund.
• You were given an unrealistic deadline to complete the tobacco cessation program.
• You paid the surcharge even though the wellness program rules were unclear or confusing.

You Were Not Given the “Full Reward”

If non-tobacco users avoided the surcharge for the entire year, tobacco users who completed the required alternative program may also be entitled to the same full benefit.

Employees should receive a retroactive refund of tobacco surcharges paid earlier in the year after completing the alternative requirement.

The Deadline Was Too Restrictive

Some plans require employees to enroll in or complete a tobacco cessation program by a specific deadline.

If the deadline was too short or difficult to meet, the alternative standard was not truly reasonable.

The Plan Did Not Clearly Explain the Alternative

Employers must clearly tell employees that a reasonable alternative is available.

Plan materials may be legally deficient if they mention the tobacco surcharge but fail to explain that employees can avoid the surcharge by completing an alternative requirement.

The Employer Kept Improper Surcharge Money

Sometimes employers breach their duties by collecting tobacco surcharges improperly or keeping those amounts for their own benefit instead of handling them properly under the health plan.

Together with our co-counsel, we've jointly represented thousands of employees nationwide in their pursuit of Justice and Accountability.  

Contact us to find out if you qualify.