Migliaccio & Rathod LLP is investigating whether Green Diamond Resource Company’s employee health plan administers tobacco-related health insurance surcharges in compliance with ERISA and federal wellness program regulations.
Publicly available 2026 benefit materials indicate that Green Diamond imposes a $100 monthly tobacco surcharge. The public FAQ reportedly allows refunds for employees who complete the Quit For Life program by certain deadlines while separately describing a physician waiver for employees whose doctors determine quitting tobacco is medically inadvisable. These materials raise questions regarding whether all employees are offered a reasonable alternative standard throughout the plan year and whether surcharge refunds remain available after the published deadlines.
Federal regulations generally require that employees who do not satisfy an outcome-based tobacco standard be offered a reasonable alternative method for earning the full premium discount, along with appropriate physician accommodations where necessary.
What Employees Report
Employees report:
- Paying a $100 monthly tobacco surcharge.
- Completing tobacco cessation activities but continuing to pay the surcharge.
- Losing eligibility for refunds because program deadlines had passed.
- Confusion regarding physician waivers and other available alternatives.
- Receiving limited information about how to qualify for removal of the surcharge.
- Continuing to pay increased premiums despite participating in cessation efforts.
Why Employees Should Be Concerned
Outcome-based wellness programs generally must provide employees with a reasonable opportunity to earn the full reward regardless of whether they successfully quit using tobacco. Restrictive completion deadlines or limitations on available alternatives may prevent employees from obtaining the full premium discount that federal regulations contemplate.
Employees who paid tobacco surcharges despite participating in cessation activities or requesting accommodations may have paid substantially more for health insurance than they otherwise should have.
This investigation seeks to determine whether Green Diamond properly administered its tobacco surcharge program and whether affected employees may be entitled to reimbursement of improperly assessed premium surcharges.
Potential Claims May Include
- ERISA Violations
- Improper Wellness Program Administration
- Failure to Provide a Reasonable Alternative Standard
- Breach of Fiduciary Duty
- Recovery of Improperly Assessed Tobacco Surcharges
- Declaratory and Injunctive Relief
Signs You May Be Affected
You may be affected if:
- You participated in Green Diamond’s employee health plan.
- You paid a monthly tobacco surcharge.
- You participated in Quit For Life or another cessation effort.
- You were denied refunds because of program deadlines.
- You requested physician accommodations or another alternative.
- You still possess payroll records, benefits materials, or communications regarding the surcharge.
If you believe you encountered these issues, we would like to hear from you. Please complete the contact form on this page, send us an email at [email protected], or give us a call at (202) 470-3520.