The lawsuit, brought by employee Justin Trout, challenges Meijer’s wellness program that imposes a $20 weekly surcharge on employees who use tobacco products. Trout argues the plan violates the Public Health Service Act’s nondiscrimination provisions by failing to provide adequate disclosures about reasonable alternative standards for employees with medical conditions.
Judge Hala Y. Jarbou denied Meijer’s motion to dismiss in part, holding that the benefits guides describing the surcharge constituted a description of the wellness program’s terms. This triggered statutory notice requirements that Meijer failed to meet by omitting a statement that physician recommendations would be accommodated.
The court’s ruling on the notice requirement addresses administrative law principles post-Loper Bright, as it determined that Department of Labor regulations implementing the disclosure mandate were authorized by ERISA section 1135. Judge Jarbou held that section 1135 provides a valid delegation of authority for the DOL to fill in details regarding how plan materials must disclose reasonable alternative standards, making the specific regulatory requirement valid.
Trout’s claims that Meijer violated the “full reward” requirement by offering only prospective surcharge refunds to employees who completed a tobacco cessation program in the second half of the year were dismissed. The court reasoned that the statute only requires employers to offer the full reward at least once per year, and does not penalize employers for providing additional partial rewards later in the plan year.
Claims regarding breach of fiduciary duty and prohibited transactions were also dismissed because Trout failed to allege how Meijer’s use of surcharges to offset its own contributions harmed the plan or violated specific plan terms. The court noted that without details on the plan’s structure, Trout could not establish standing or state a claim for fiduciary breach.
The court further limited the putative class to employees who paid surcharges on or after November 5, 2021, applying a four-year statute of limitations under 28 U.S.C. section 1658 to claims arising under post-1990 ERISA amendments prohibiting health-status discrimination.
Trout may pursue equitable restitution and disgorgement under section 502(a)(3) of ERISA, but cannot seek surcharge. The court held that while disgorgement is an equitable remedy available under ERISA, Trout must trace the surcharges to specific funds within the plan to maintain those claims.