Understanding the Recent Wave of Litigation Targeting Tobacco-Free Wellness Programs

Litigation attorneys Kayla Pragid, Lindsey Camp and Chelsea McCarthy co-authored an article for the Employee Benefit Plan Review exploring a new trend of class action lawsuits targeting tobacco-free wellness programs. The plaintiffs in these cases allege the programs do not comply with the Employee Retirement Income Security Act of 1974 (ERISA) and that plan fiduciaries violate their fiduciary duties when they impose and collect tobacco surcharges. In their article, the authors review ERISA Section 702(b), the relevant statute for this area, along with how tobacco cessation programs typically operate. They then analyze whether tobacco surcharges are permissible under the statute and break down a regulation from the U.S. Departments of Labor, Treasury and Health and Human Services on the matter. The piece concludes by advising employers to retain legal counsel to review their wellness programs to ensure compliance and minimize risks resulting from anticipated challenges from plan sponsors and plan fiduciaries.

The attorneys also published a Holland & Knight alert on this topic.

READ: Understanding the Recent Wave of Litigation Targeting Tobacco-Free Wellness Programs