Migliaccio & Rathod LLP is investigating whether City National Bank’s employee health plan administers tobacco-related health insurance surcharges in compliance with the Employee Retirement Income Security Act (“ERISA”) and federal wellness program regulations.
Federal law generally permits employers to offer outcome-based tobacco wellness programs, but those programs ordinarily must provide employees who do not satisfy the tobacco-free standard with a reasonable alternative standard (“RAS”) for earning the full premium discount. Publicly available 2026 benefit materials indicate that City National Bank imposes a $100 monthly tobacco surcharge for employees enrolled in its medical plan who use tobacco products. According to the publicly available materials reviewed, the benefits guide describes the surcharge but does not clearly identify a reasonable alternative standard, explain how employees may request one, describe physician accommodations, or explain how improperly collected surcharges may be refunded.
This investigation seeks to determine whether City National Bank’s tobacco surcharge program complies with applicable ERISA wellness program requirements.
What Employees Report
Employees report:
- Paying a $100 monthly tobacco-related premium surcharge.
- Receiving little information regarding how to avoid or remove the surcharge.
- Not being informed about reasonable alternative standards.
- Being unsure whether physician accommodations were available.
- Continuing to pay increased premiums despite participating in tobacco cessation efforts.
- Receiving limited guidance regarding reimbursement of previously paid surcharges.
Why Employees Should Be Concerned
Federal wellness program regulations generally require outcome-based tobacco programs to offer a reasonable alternative standard to every participant who does not satisfy the tobacco-free requirement. Employees should receive sufficient information to understand how they may qualify for the full premium reward without being required to successfully quit tobacco.
If publicly available materials fail to adequately disclose available alternatives or if the program does not provide employees with the full opportunities required under federal law, participants may have paid higher health insurance premiums than they otherwise should have.
This investigation seeks to determine whether City National Bank properly administered its tobacco surcharge program and whether affected employees may be entitled to reimbursement of improperly assessed surcharges.
Potential Claims May Include
- ERISA Violations
- Failure to Provide a Reasonable Alternative Standard
- Improper Wellness Program Administration
- 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 City National Bank’s employee health plan.
- You paid a tobacco-related premium surcharge.
- You attempted to participate in a tobacco cessation activity.
- You were not informed about another reasonable alternative or physician accommodation.
- You continued paying the surcharge despite your participation.
- You still possess payroll records, enrollment materials, or benefits 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.