Are you an employer that sponsors a health plan with a “tobacco surcharge program?”
If so, a recent decision by a district court casts some doubt on how to properly design such a program.
As a result, it might be time to review your wellness program once again.
A copy of the court’s decision is available here: Microsoft Word – 3-24cv686 MTD
In the case under discussion, the employer provided a “reward” to smokers on the health plan that participated in a smoking cessation program.
However, employees complained that they would not get a “full reward” upon completion of a program, if they completed the program during the plan year.
The court found that the plaintiffs had plausibly pled that there were violations, because the reward only applied prospectively rather than allowing recovery of previously paid surcharges.
Employers who have or are considering a tobacco surcharge or other wellness program should speak with ERISA counsel about this case (and other recent cases) that impact the design and operation of wellness programs.