The Employee Retirement Income Security Act (ERISA), has anti-discrimination provisions which require healthcare plans with surcharges for poor health practices to provide a reasonable alternative standard to such surcharges.
Lately there has been a slew of litigation pertaining to tobacco surcharges by health plans, more than a dozen recent lawsuits. A recent lawsuit at Bass Pro Group alleged the company's health plan violated this law which requires plans with tobacco surcharges to provide a reasonable alternative standard like participation in a smoking cessation program, in lieu of surcharges. Plaintiffs contended the tobacco cessation program used by the employer went too far because workers could not avoid the penalty by completing the program, but instead had to remain tobacco-free for a period of time. The employer settled the class action with tobacco-using workers for approximately $5 million.
This article is part of our February 2025 Newsletter.
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