GardaWorld, a security company, has moved to dismiss a proposed class action lawsuit over monthly surcharges in its health insurance plan for participants who use tobacco or refuse COVID-19 vaccines. In its motion, GardaWorld argues that the surcharges comply with the Employee Retirement Income Security Act (ERISA). The case is Artis et al. v. GardaWorld Cash Service Inc., case number 3:24-cv-00837, U.S. District Court for the Western District of North Carolina.
GardaWorld claims that the tobacco surcharge complies with the plain reading of ERISA. According to the U.S. Supreme Court’s ruling earlier this year in Loper Bright Enterprises v. Raimondo, it must rely on the statutory language rather than the U.S. Department of Labor regulations interpreting ERISA. In Loper, the Supreme Court reversed the decades-old Chevron doctrine, which required courts to defer to federal regulatory agencies’ interpretations in the event of ambiguous statutory language.
The security company also addresses Artis’s claim that it failed to offer her a reasonable alternative for the surcharge related to her refusal of the COVID-19 vaccine. GardaWorld argues that Artis wasn’t entitled to a reasonable alternative, which is required for wellness program surcharges only when a medical condition makes it too difficult or inadvisable to comply with the standard requirement. Since Artis does not point to any medical condition that prevents her from getting the COVID-19 vaccine, GardaWorld claims she is not entitled to a reasonable alternative.
Furthermore, GardaWorld points out it offers a reasonable alternative to the tobacco surcharge program; participants may participate in a tobacco cessation program to avoid the surcharges.
Artis contends that the reasonable alternative is insufficient because it only allows participants to avoid future surcharges, not recover past surcharges they have already paid.
However, GardaWorld again relies on Loper Bright to focus on the “best read” of ERISA instead of regulatory guidance, which states that rewards are to be granted to participants only for “adherence to programs of health promotion.”
Finally, GardaWorld argues that Artis and the other workers lack standing because they have never participated in a tobacco cessation program. The company also claims it can’t be liable as a fiduciary of the benefits plan, as it acts only as a settler of the plan.