Some employers impose a tobacco surcharge that makes workers pay more for health insurance, because they smoke, vape, use chewing tobacco, snuff or other nicotine products.

You or a family member may have legal claims and may be able to recover some or all of what was paid.

What is a tobacco surcharge?

Many employers charge workers more for workplace health insurance if they or a covered family member use tobacco or nicotine products.

The charge may appear as:

• A tobacco or nicotine surcharge
• A higher health insurance premium
• A wellness charge
• A tobacco-user rate
• The loss of a non-tobacco discount

These charges can add up quickly. Even a $20 weekly surcharge can exceed $1,000 in one year.

When might a tobacco surcharge be improper?

Federal employee-benefit law places conditions on certain health-plan wellness programs.

A tobacco or nicotine surcharge may warrant legal review if:

• No real alternative was offered. You had no meaningful way to qualify for the lower premium, such as participating in a tobacco-cessation program.
• The alternative was not clearly disclosed. Enrollment materials or premium chart showed the surcharge, but did not clearly explain how to avoid it.
• You had to actually quit. Participating in or completing a reasonable alternative may be enough even if you continue using tobacco or nicotine.
• You did not receive the full promised benefit. You completed the program, but the surcharge continued or the plan did not provide the reward described in its terms.

Whether a surcharge is improper depends on the health plan’s documents, disclosures and administration.

Who may be affected by a tobacco surcharge?

Employer definitions vary. A “tobacco surcharge” may apply to:

• Cigarettes or cigars
• Pipes or hookah
• Chewing tobacco or snuff
• E-cigarettes or vaping devices
• Synthetic nicotine
• Other tobacco or nicotine products

Some employers also impose the charge when a spouse, partner or other family member covered by the employee’s health plan uses one of these products.

Could you recover what you paid?

Possibly. Employees have filed class actions alleging that employers collected tobacco or nicotine surcharges without offering a lawful alternative, providing adequate notice or delivering the promised reward.

Courts have reached different results depending on the plan and the employee’s circumstances. Paying a surcharge does not automatically establish a claim, but the charge may warrant investigation.

You or a family member may have legal claims

If you paid a tobacco or nicotine surcharge—or paid more because a family member covered by your workplace health plan used a covered product—you may have legal claims and may be able to recover some or all of the surcharge payments.

Contact Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is investigating employer tobacco and nicotine-related health insurance surcharges.

If you, a friend or a covered family member paid one of these charges, contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], for a free, no-obligation legal evaluation.

About Kehoe Law Firm, P.C.

Kehoe Law Firm, P.C. is a nationally-recognized, plaintiff-side class action law firm representing investors and consumers in matters involving securities fraud, corporate misconduct, mergers and acquisitions, antitrust violations, whistleblower claims, data breaches, consumer fraud, employment law violations, and retirement-plan mismanagement. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.

All representation is provided on a contingency-fee basis, and plaintiffs are not responsible for attorneys’ fees, court costs, or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval. 

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