Do you pay extra for your health insurance at work because you use tobacco? If so, that surcharge may be illegal — and you may be entitled to get your money back!
At Edelson Lechtzin LLP, we are investigating employers across the country that charge these fees. Some courts have already allowed employees to move forward with cases challenging them.
What is a tobacco surcharge?
Many companies add a monthly or per-paycheck fee to the health insurance costs of employees who use tobacco. These charges can add up fast — hundreds of dollars a year. In one case, employees were charged about $480 more per year just for being tobacco users.
Although employers are allowed to run wellness programs that encourage healthier choices, a federal law called ERISA sets strict rules. If your employer doesn’t follow every one of them, the surcharge can be unlawful.
What the law requires
To charge a tobacco fee legally, an employer generally must:
- Offer a real alternative. Employees must have a genuine way to avoid the fee — such as a stop-smoking program — no matter their health.
- Tell you about it clearly. The alternative, and how to use it, must be spelled out in the plan materials you actually receive. That includes letting you know your own doctor’s recommendations count.
- Give the full reward. If you complete the program, you should get the full benefit — including a refund of the surcharges you already paid.
When employers skip these steps, they may be breaking the law and keeping money that belongs to their employees.
Courts are letting these cases go forward
This isn’t just theory. Judges have refused to throw these cases out:
- In a Virginia case, the court denied the employer’s motion to dismiss and let employees pursue claims that the surcharge violated ERISA and that the company failed to give proper notice of a reasonable alternative. See Bokma v. Performance Food Grp., Inc., 783 F. Supp. 3d 882 (E.D. Va. 2025).
- In a Minnesota case against Travelers, the court allowed a claim to move forward because the plan failed to include language the law requires. See Chirinian v. Travelers Companies, Inc., No. 24-CV-3956 (LMP/DTS), 2025 WL 2147271 (D. Minn. July 29, 2025).
- In an Illinois case, the court let an employee’s notice claim proceed against the employer. See Buescher v. N. Am. Lighting, Inc., 791 F. Supp. 3d 873 (C.D. Ill. 2025).
- In Tennessee, a federal judge denied Dollar General’s attempt to dismiss employees’ plan-wide claims, finding the complaint had enough detail to stay in court.
You may be able to help lead a class action — and recover what you paid
If you or a family member paid a tobacco surcharge through an employer’s health plan, we want to hear from you. Employees who step forward can help hold companies accountable and seek refunds for thousands of coworkers.
Contact Edelson Lechtzin LLP today for a free, confidential review of your situation. There is no cost to speak with us, and you pay nothing unless we recover money on your behalf.