By Timothy S. Donahue
Top Takeaways:
- A former JPMorgan employee is challenging the bank’s $80/month tobacco surcharge as unlawful under federal wellness program rules.
- The lawsuit focuses on the alleged lack of retroactive reimbursement and insufficient notice regarding the cessation alternative.
- Similar tobacco-surcharge cases are being filed nationwide under ERISA/HIPAA wellness-program compliance theories.
JPMorgan Chase & Co. is facing a proposed class action from a former employee who alleges the bank unlawfully charges tobacco-using workers an extra $80 per month for health coverage without providing a compliant way for employees to avoid or recover those fees.
The lawsuit was filed by Robyn Carmichael, who alleges JPMorgan’s health plan imposes a monthly penalty on employees who use tobacco but does not provide a mechanism for retroactive reimbursement of surcharges already paid, even when an employee completes a tobacco cessation program that qualifies them to have the surcharge waived.
According to the complaint, JPMorgan allows employees to have the surcharge removed prospectively after completing a cessation program, but the plan allegedly does not provide retroactive relief for earlier months in the same plan year. Carmichael argues that structure violates federal rules governing health-contingent wellness programs.
The suit also alleges that JPMorgan failed to sufficiently publicize the availability of the cessation program and the standards needed to qualify for a waiver.
Employer tobacco surcharges have become a growing litigation focus nationwide, with plaintiffs in multiple cases alleging that plans failed to provide the “full reward” required under federal wellness-program regulations, including through retroactive reimbursement after an alternative standard is met.
JPMorgan did not immediately respond publicly to the allegations in the initial reporting.
