Employee Sues Regions Over $390 Tobacco Surcharge

A former worker alleges the bank's extra health insurance charge for tobacco and vape users violates federal law.

Updated on Nov. 3, 2026 in Insurance

Employee Sues Regions Over $390 Tobacco Surcharge

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Should employers be allowed to charge workers extra health insurance for tobacco use?

A Regions Bank employee has sued Regions Bank and its parent company over a $390 annual health insurance surcharge applied to tobacco and vape users. The complaint was filed in the U.S. District Court for the Middle District of Florida.

Why it matters

The lawsuit tests whether employers can impose tobacco-use premium surcharges under the Employee Retirement Income Security Act, which permits such penalties only when an alternative avoidance program is offered. It raises questions for workers across the United States who pay higher premiums for tobacco use.

Regions' enrollment guide listed two premium rate tables, one for tobacco and vape users and one for non-users, with a $390 annual difference. The guide did not mention any alternative program through which employees could avoid the charge, and the court has not yet ruled on the allegations.

The players

Regions Bank

Regions Bank is a large U.S. regional bank headquartered in Birmingham, Alabama, and a named defendant in the employee's lawsuit over the tobacco surcharge.

The details

The former employee alleges the surcharge violates the Employee Retirement Income Security Act because the enrollment guide offered no alternative avoidance program. The complaint names Regions Bank and its parent company as defendants and was filed on a Monday in federal court in Florida.

Monday, November 2, 2026: Complaint filed in the U.S. District Court for the Middle District of Florida.

Roadmap

The case turns on ERISA's rule that tobacco-use premium penalties are permitted only when an alternative avoidance program is available to employees. A ruling could clarify how far employers can go in charging tobacco users higher health insurance premiums.

Workers at employers that charge tobacco surcharges may pay hundreds of dollars more each year for health coverage. Employees should check their enrollment guides for any alternative programs that could reduce or avoid the charge.

The takeaway

Employees paying tobacco surcharges should review their benefits materials closely to see whether a wellness or cessation program can reduce the premium. Workers who believe a surcharge is unlawful can consult an employment attorney about their options.