Did Your Employer Charge You More for Health Insurance Because of Tobacco Use?
If your employer deducted a tobacco or nicotine surcharge from your pay for health insurance, you may have rights under the Employee Retirement Income Security Act (ERISA). Tobacco surcharges are not automatically unlawful, but employer health plans that impose them through wellness programs must satisfy federal requirements, including rules governing reasonable alternatives and employee notices.
Two recently filed proposed class actions illustrate the issue.
An October 22, 2026 class action complaint against ADT LLC alleges a $100 monthly tobacco surcharge and challenges a policy that, according to the complaint, removes the charge only going forward after completion of a cessation program.
An October 23, 2026 class action complaint against Hard Rock International (USA), Inc. challenges a $15 weekly surcharge described in its 2026 benefits guide and alleges that employees were not adequately told how to obtain the full premium reward, including credits for earlier charges, or about personal-physician accommodations.
The class action lawsuits allege that employees may have paid more for medical coverage without the protections required by ERISA. The complaints seek relief for proposed classes of affected plan participants.
Paid a Tobacco Surcharge at Work?
This issue is not limited to ADT or Hard Rock. If you currently work—or previously worked—for a company that charged you a tobacco surcharge through an employer-sponsored health plan, you may have rights under ERISA.
Importantly, not all tobacco surcharges violate ERISA. Whether a surcharge complies with ERISA depends on the plan’s terms, required disclosures, the availability of reasonable alternatives to avoid the surcharge, and how the program was administered.
If you paid a tobacco surcharge at work, send us a message to request an evaluation of your circumstances and potential legal rights.
For a free, no-obligation legal evaluation, contact:
Michael Yarnoff, Esq.
(215) 792-6676, Ext. 804
[email protected]
[email protected]
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, as well as ERISA and retirement plan litigation. Its attorneys have served as lead or co-lead counsel in major securities cases, recovering more than $10 billion for institutional and individual investors.
Kehoe Law Firm’s class action legal services are provided on a contingency-fee basis, meaning plaintiffs are not responsible for attorneys’ fees or litigation expenses. Any request for attorneys’ fees and expenses will be subject to court approval.
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