In addition to the seven lawsuits filed in September/October, at least three more lawsuits have been filed against employers who charge more for health insurance to tobacco users. These lawsuits follow a similar theme to the previous lawsuits, alleging two primary violations of the Affordable Care Act (ACA) wellness incentive rules: 1) failure to provide the full reward after meeting a reasonable alternative standard; and 2) failure to provide adequate notice that the full reward will be available and that the recommendations of an individual’s personal physician will be accommodated.
The three newest lawsuits are against The Traveler’s Companies, Inc., The Campbell Soup Company, and XPO, Inc. and GXO Logistics, Inc. Employees from these companies have filed complaints alleging that the employer health plan did not provide the employees with the full reward (i.e., lower health insurance premium) once they met the reasonable alternative standard, such as completing a smoking cessation program. Instead, these companies state that once an employee completes a tobacco cessation program, they are eligible for the lower health insurance premium on a going forward basis only. That is, there is no retroactive reimbursement for paying the higher premium before completing the tobacco cessation program. The plaintiff employees argue that failure to reimburse them the higher premium payments does not constitute the “full reward” under the ACA wellness incentive rules.
For example, the plaintiffs in the XPO and GXO case claim the following language used to notify employees of their ability to avoid the tobacco surcharge violates the ACA wellness incentive rules:
TOBACCO SURCHARGE
If you are a tobacco user, you are required to pay a tobacco surcharge of $100 per month in addition to the medical plan cost. If you complete the FREE tobacco cessation program through Anthem, you can have this surcharge removed for the remainder of the year.
(Emphasis added.) Plaintiffs argue that the phrase “the remainder of the year” violates the ACA wellness incentive rules because it implies that the employee is ineligible for reimbursement of the higher premium paid before completing the tobacco cessation program.
Also, the plaintiffs argue that sample notice above fails to notify employees that they are eligible for the full reward if they complete the tobacco cessation program, and it fails to notify them that recommendations of an individual’s personal physician will be accommodated, requirements that the plaintiffs argue must be part of the notice.
Because of these missing details in the tobacco surcharge wellness program, the plaintiffs believe they are entitled to reimbursement of all tobacco surcharges, other monetary damages, and reasonable attorney fees, among other injunctive and declaratory relief.
Key Takeaway:
If you are an employer that charges higher premium for tobacco users in your health plan, it’s time to audit your tobacco surcharge program for compliance with the ACA wellness incentive rules. You may be in substantial compliance, but these lawsuits are based on finding small gaps in compliance. Contact Wellness Law today so we can help you avoid unnecessary legal expenses and compliance headaches.