Court Scrutiny: Tobacco Surcharges &
Wellness Program Alternatives
Two federal trial courts* have weighed in on the imposition of tobacco surcharges under employer-sponsored group health plans and the provision of reasonable alternative standards under employer wellness programs. In one case, a former employee filed a putative class action on behalf of all employees who had been “illegally surcharged” for tobacco use under her employer’s health plan. She asserted that the wellness program failed to comply with ERISA and federal regulations by (1) imposing arbitrary deadlines for enrolling in a tobacco cessation program, thus denying participants the “full reward”; (2) failing to properly disclose the availability of a reasonable alternative standard; and (3) failing to inform participants of their right to involve personal physicians in the crafting of the alternative standard.
The employer responded that its plan complied with regulations by offering participants an annual opportunity to avoid the surcharge through timely completion of the cessation program and by providing retroactive refunds to participants who completed the program by the deadline. The court agreed that the plan’s structure met regulatory requirements. However, noting that the plan’s summary plan description lacked wording that would inform participants of their right to involve a personal physician, the court allowed that portion of the claim to proceed.
In the other case, an employer health plan similarly imposed a surcharge for tobacco use unless participants completed a cessation program, but completion of the program only allowed the surcharge to be waived for the following year—there were no refunds for the current year. A former employee alleged that the prospective-only waiver violated ERISA because it did not provide a retroactive refund of the surcharge when the cessation program was completed during the year.
The employer argued—and the court agreed—that the plan was compliant because it gave employees a full year to complete the cessation program before a surcharge would be imposed. Thus, the “full reward” was available to all participants who, in the prior year, were either not tobacco users or completed the cessation program. The employee separately claimed that the plan provided inadequate notice of the cessation program as a reasonable alternative standard; that claim was allowed to proceed based on a technicality.
Tobacco surcharges and alternative standards for avoiding them continue to be challenged in the courts. Participants must be offered a genuine opportunity to avoid surcharges through a reasonable alternative standard—typically, a tobacco cessation program—and plan sponsors must ensure that the “full reward” is available as required. Plan sponsors and their advisors should regularly review plan documents and communications to ensure full compliance with applicable substantive and procedural requirements.
*Chirinian v. Travelers Cos., Inc., 2025 WL 2147271 (D. Minn. 2025); Buescher v. N. Am. Lighting, Inc., 2025 WL 1927503 (C.D. Ill. 2025).
Work-Life Balance Isn’t Working
Employees want work-life balance, but it might be a fool’s errand. A majority of employees (83%) view work-life balance as the top motivator for staying with their current job or finding a new one, according to a report from staffing agency Randstad earlier this year. It’s the first time employees reported work-life balance as a bigger job motivator than compensation in the 22 years since the report was first published.
But some workplace experts caution HR pros against pushing work-life balance too strongly on employees because that balance might be impossible to achieve. Shark Tank entrepreneur and business leader Barbara Corcoran, for instance, says work-life balance doesn’t exist.
Why It’s Not Working
Work-life balance emerged in the ‘70s and ‘80s as employees sought both professional and personal success, especially women who wanted careers without sacrificing personal goals like starting a family. Work-life balance then gained traction into the 21st century as more employers offered maternity leave and wellness benefits, and established norms around a 40-hour workweek.
But, since the pandemic, the lines between work and life have blurred, said Jennifer Moss, workplace strategist and author of Unlocking Happiness at Work, and employees now have “a persistent, constant inability to bifurcate” the two. While Covid-19 prompted more flexibility in the workplace, Moss told HR Brew there’s also been a corrosion in how employees view their work and personal lives.
“We’re finding this increase in … pajama hours, where people can’t get work done in the day, and so they look at this as this ‘fun’ work in the evening,” she said. “When we think about that as harmonious, then it’s dangerous because we’re not actually doing fun work. We’re still working.”
Before the pandemic, and especially now with return-to-office mandates, Moss said there are more “unrealized hours” lost to the workplace. From commuting, taking kids to and from childcare, waking up earlier, and getting ready in the morning, she said it takes time away from living.
Strive For Harmony, Not Balance
Work-life balance might not be working because many employees see their personal and professional lives as a “contrast” or in “competition” with one another, Moss said. She recommends instead focusing on work-life harmony.
“Harmony, which means that both things are working in a way that is healthy, and fluid, and supporting each other and with an approach to well-being,” she said. “When I see people that really have that healthy harmony between work and life, they’re so high performing … They don’t feel like one is stealing from the other.”
Work-life integration, Grant said, is often demonstrated by employees who don’t mind work being a larger part of their lives. “They tend to have pictures of their kids at their desk. They talk about their work at home. They invite their colleagues over for dinner,” he said. “Segmenters want none of that.”
Employees who want work-life segmentation value strict boundaries, reserve relationships and emotions for outside of work, and tend to be more task-focused while at work, he said. By contrast, segmenters are typically more satisfied with their jobs, report higher well-being, feel less stressed, and are less likely to burnout, Grant said.
What HR Can Do
While there are benefits to work-life integration, like happy hour with coworkers and work friendships, Grant said most US companies lean too far into work-life integration, so HR could help promote more segmentation.
“If we moved a little bit more in the segmentation direction and said, ‘Yeah, harmony is maybe a better way to talk about it because what that signals to me is my job is not going to interfere with my family, my friends, my health or my hobbies,’” he explained.
Another way HR pros can promote harmony, Grant said, is by offering benefits that align with both work-life integration and segmentation, so segmenters can still thrive in a more integrated workplace and vice versa. For instance, he said, if your company has an on-site gym for employees, they could offer stipends for off-site gym memberships, too.
“When we use the term harmony,” Moss said, “It’s about not just integrating both [work and life], but actually striving for something better.”
Cohen, Mikaela. 2025. “Work-Life Balance Isn’t Working. Here’s What HR Needs to Know.” HR Brew. Morning Brew. July 30, 2025. https://www.hr-brew.com/stories/2025/07/30/work-life-balance-isn-t-working-here-s-what-hr-needs-to-know.
Fulfilling Plan Document Requests
Employers occasionally receive a written request from a participant (or the participant’s representative) in the employer’s group health plan seeking copies of the health plan document or other records related to the employer’s group health plan. It is easy for these requests to get buried or pushed aside by other, seemingly higher priority, tasks on the plate of a busy human resources representative. However, responding to such requests in a timely manner is very important, and the failure to do so can result in stiff monetary penalties.
ERISA requires a plan administrator (generally the employer sponsoring the health plan) to furnish copies of specified plan documents within 30 days after a written request from a participant or beneficiary. While employers commonly assume the request should be directed toward the plan’s insurance carrier or third-party administrator, under ERISA, the employer is the plan administrator. Failure to timely furnish requested documents that are subject to this requirement can result in penalties of up to $110 per day (starting on the 31st day after the request).
This penalty is imposed at the discretion of a court, meaning the penalty is not automatically imposed by the DOL but rather in a lawsuit brought by the participant whose request goes unanswered. Courts have discretion with respect to the penalty amount and may award less than the full $110 per day. While the maximum penalty amount may be adjusted from time to time (it was raised from $100 to $110 in 1997), it is not among the ERISA penalties required to be adjusted annually for inflation.
To avoid litigation and potential penalty, employers should take seriously any documentation requests received from participants and ensure the employer, in consultation with legal counsel, responds appropriately and in a timely manner.
