DOL Provides More Clarity on Employee Wellness Programs

On August 26, 2026, the U.S. Department of Labor (DOL) addressed employee wellness programs that permit fees on workers’ health premiums for things like tobacco use.  The Guidance was in response to legal issues raised by dozens of recent class actions targeting employers’ fees on workers’ health plans, as part of wellness programs. 

Employers can legally charge such fees in appropriate circumstances, but they must offer health plan participants access to an alternative to paying the fee, such as a smoking cessation program.  In addressing one of the important issues in the cases, federal agencies will not take enforcement action against plans that do not provide employees retroactive rewards of health fees if they complete an alternative to the surcharges.  The new Guidance is in contrast to a 2013 rule on wellness programs explicitly stating that employers were obligated to retroactively reimburse employees who completed the program’s requirements, regardless of when they did so in the plan year.  The Guidance also clarifies that the plan materials merely mentioning the existence of a wellness program are not also required to disclose the availability of an alternative.

This article is part of our October 2026 Newsletter. 

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