Advocate Aurora Health is urging an Illinois federal judge to permanently dismiss a lawsuit filed by former employees over an alleged illegal tobacco-use surcharge in its health plan. The nonprofit health system argues that after three attempts, the plaintiffs have failed to present a viable claim under the Employee Retirement Income Security Act (ERISA), according to its motion filed Thursday.

The Tobacco Surcharge and ERISA Claims

The former employees contend that Advocate Aurora’s tobacco cessation program violates ERISA's anti-discrimination provisions, alleging it unfairly penalizes employees based on health status. Specifically, they claim the program’s rules are overly strict and do not offer reimbursements for months when late enrollees had already paid the surcharge.

Advocate counters that the program complies fully with ERISA regulations. It provides a reasonable alternative to avoid the surcharge—a requirement under the law—through its Healthy Breathe Program, which participants can join in January each year. Late enrollees are allowed to enter mid-year and receive pro-rated benefits to avoid the surcharge moving forward, which Advocate argues exceeds ERISA’s requirements.

“The law does not require Advocate to offer anything more,” the motion states, adding that the program ensures individuals can qualify for the reward at least once annually, as mandated by the regulations.

Advocate’s Arguments for Dismissal

Advocate Aurora Health makes several key arguments to support its motion to dismiss:

• Retroactive Reimbursement Not Required: Advocate asserts that ERISA does not mandate retroactive reimbursement for late enrollees in wellness programs. Instead, its pro-rated approach is permissible and compliant with the law.
• Lack of Specificity: The plaintiffs’ claims that the cessation program is "unreasonably strict" are unsupported by any standard or tied to their personal experiences, rendering them conclusory and insufficient.
• Failure to Exhaust Administrative Remedies: Advocate contends the plaintiffs did not exhaust the claims and appeals process outlined in their health plans before filing suit, a procedural requirement under ERISA.
• Pro-Compliance Design: Advocate highlights that its program goes beyond what the law requires by allowing late enrollees to join and benefit from reduced surcharges mid-year, even though it is not obligated to do so.

Plaintiff Allegations

The plaintiffs, who filed the proposed class action in September, argue that Advocate Aurora’s surcharge unfairly penalizes employees who do not enroll in the cessation program by January. They claim the lack of retroactive reimbursements for late enrollees violates ERISA’s anti-discrimination provisions.

Additionally, they allege that the cessation program is overly strict but have not provided clear metrics to substantiate that claim.

Broader Implications

The lawsuit underscores ongoing debates over wellness program surcharges and the extent to which they comply with ERISA's anti-discrimination provisions. A ruling in favor of Advocate Aurora Health could strengthen employer defenses for such programs, while a decision for the plaintiffs may require employers to reevaluate how they design and administer wellness incentives.