Sedgwick Narrows Suit Challenging Health Plan Smoker Penalties

Sedgwick Claims Management Services Inc. defeated key allegations in a lawsuit challenging its decision to charge tobacco-using workers an extra $1,300 each year for health coverage, but the lawsuit will advance on a narrowed basis.

The plaintiff challenged Sedgwick’s practice of retroactively reimbursing tobacco penalties for workers who complete a quit-smoking program before June 30 in a calendar year, but not for participants who complete the program later in the year. She says this flouts the Employee Retirement Income Security Act and related regulations, which allow health plans to charge tobacco penalties only if workers are provided an alternative standard—like ...