Employees who Paid Unlawful Tobacco Surcharge through Wellness Program Get $145K in Restitution

December 10, 2018

A federal district court has ordered the fiduciaries of the Dorel Juvenile Group Inc. Welfare Benefit Plan to pay restitution of $145,635 to 596 employees of the Dorel Juvenile Group Inc.’s California, Indiana, and Massachusetts facilities who paid a tobacco use surcharge as part of their medical insurance premium. The surcharge was paid through a wellness program.

The court found that the Massachusetts-based company violated the Employee Retirement Income Security Act (ERISA) when it discriminated against employees, by requiring them to pay health premium surcharges through the imposition of an impermissible wellness program. In addition to the monetary relief to the employees, Dorel Juvenile Group must revise its Tobacco Surcharge Wellness Program to comply with ERISA, which prohibits group health plans from discriminating against individuals in eligibility and continued eligibility for benefits, and in individual premium or contribution rates on the basis of any health-status related factor. "This settlement recovers money for employees who were unlawfully required to pay a tobacco use surcharge without the availability of the required reasonable alternative standard or waiver," ERISA Regional Director L. Joe Rivers said.