Federal Departments Issue Wellness Program FAQs, But Questions Remain

On August 26, 2026, the Departments of Labor, Health and Human Services and the Treasury published FAQs addressing certain critical components of the Health Insurance Portability and Accountability Act (HIPAA) wellness program rules. The FAQs were welcomed by employers, as the HIPAA wellness program rules have been the subject of more than 80 class action lawsuits claiming that wellness programs imposing premium surcharges for tobacco use violate the Employee Retirement Income Security Act of 1974 (ERISA).

At the heart of those cases is whether or not employers can prospectively remove the premium surcharge when a participant who uses tobacco completes a wellness program’s “reasonable alternative standard” (for example, a tobacco cessation course). Plaintiffs argue that employers are required to provide retroactive reimbursement of the total amount of premium surcharges tobacco-using participants paid during a plan year before they completed the tobacco cessation course. Many