JPMorgan Class Action Lawsuit, Alleges Tobacco Surcharges Violate ERISA, What Employees Should Know About the $80 Monthly Charge
JPMorgan Chase employees who use tobacco products are challenging an $80 monthly surcharge they claim violates federal law. Former employee Robyn D. Carmichael filed a class action lawsuit in January 2026 alleging the banking giant’s tobacco penalty breaches ERISA’s anti-discrimination provisions by failing to offer proper alternatives for avoiding the charge.
What the JPMorgan ERISA Lawsuit Is About
The class action claims JPMorgan violated the Employee Retirement Income Security Act by imposing higher health insurance premiums on tobacco-using employees without providing a compliant wellness program. ERISA—federal law governing employer-sponsored benefit plans—permits tobacco surcharges only when structured as legitimate wellness initiatives.
JPMorgan charges tobacco-using employees an $80 monthly penalty, which adds up to $960 annually. The lawsuit argues this surcharge discriminates based on health status without meeting federal requirements for wellness programs.
The Core Allegations Against JPMorgan
According to the complaint, while ERISA allows wellness programs that incentivize healthy behavior, these programs must meet strict criteria. The lawsuit identifies two key violations:
First, employees who complete a tobacco cessation program can only avoid future charges—not receive retroactive reimbursement for penalties already paid. Federal regulations require participants to access the full benefit once they meet alternative standards.
Second, the lawsuit claims JPMorgan failed to adequately communicate the cessation program option in all plan materials. Department of Labor regulations require alternative standards be disclosed clearly to members.
This case mirrors a broader pattern. Since October 2024, at least eight similar lawsuits have targeted major employers including Walmart, Target, and 7-Eleven, all challenging tobacco surcharges as discriminatory.
Who Is Involved in the Lawsuit
Plaintiff Robyn D. Carmichael, a former JPMorgan employee, filed the case in U.S. District Court for the Southern District of New York. The case is Carmichael v. JPMorgan Chase & Co., Case No. 1:26-cv-00305.
Carmichael seeks to represent a nationwide class of individuals who paid JPMorgan’s tobacco surcharge in connection with the company’s healthcare program for active employees at any time from six years prior to filing to the present.
Her legal team includes attorneys from Chirinos Law Firm PLLC, Walcheske & Luzi LLC, and Bloom Legal LLC.
What Employees Paid in Surcharges
JPMorgan imposed the $80 monthly penalty on employees who smoke. For affected workers, this meant paying nearly $1,000 more per year for health coverage compared to non-tobacco users. The class could potentially include thousands of current and former JPMorgan employees who paid these charges over a six-year period.
Current Status of the Case
The lawsuit was filed in January 2026 and remains in early litigation stages. No settlement has been reached, and the court has not yet ruled on class certification.
Carmichael demands a jury trial and requests declaratory and injunctive relief, reimbursement, disgorgement, and an award of attorneys’ fees and costs.
How This Fits Into Broader ERISA Litigation
JPMorgan faces multiple ERISA challenges beyond tobacco surcharges. In March 2025, another class action was filed alleging JPMorgan breached fiduciary duties by mismanaging prescription drug benefits and overpaying its pharmacy benefit manager.
The Department of Labor has also taken enforcement action, requiring Flying Food Group LLC to reimburse $134,222 to employees charged tobacco surcharges in September 2023. These government actions signal regulators view certain tobacco surcharge structures as problematic.
What You Must Know
Why Tobacco Surcharges Are Under Legal Scrutiny
The Affordable Care Act permits employers to charge tobacco users up to 50% more for health insurance—but only within a properly designed wellness program. Plaintiffs argue employers must provide reasonable alternative standards, such as smoking cessation programs, through which members can avoid the surcharge by completing the program.
The dispute centers on whether completing a cessation program should eliminate charges going forward only, or also trigger refunds for past surcharges paid during the plan year.
How JPMorgan’s Program Allegedly Falls Short
According to the lawsuit, JPMorgan’s approach violates ERISA in specific ways:
- Employees who complete cessation programs see future charges waived but receive no retroactive reimbursement
- The alternative standard wasn’t clearly communicated in all plan documents
- The surcharge penalizes health status rather than promoting wellness
These lawsuits argue tobacco surcharges linked to group health plans disproportionately impact tobacco users by increasing costs without providing sufficient means to avoid the surcharges.
What This Means for Employee Benefits
If courts rule tobacco surcharges structured like JPMorgan’s violate ERISA, employers nationwide may need to redesign wellness programs. This could mean:
- Retroactive refunds for employees who complete cessation programs
- Enhanced disclosure requirements about alternative standards
- Stricter oversight of surcharge structures
The outcome could affect how employers balance wellness incentives with anti-discrimination protections for millions of workers.
What to Do Next
How to Stay Informed About the Case
Court documents for Carmichael v. JPMorgan Chase & Co. (Case No. 1:26-cv-00305) are available through PACER, the federal court electronic records system. You can track filings and developments through the U.S. District Court for the Southern District of New York.
Class members typically receive direct notice if the court certifies a class and approves a settlement. However, the case remains in early stages with no settlement currently proposed.
When to Consider Legal Guidance
If you’re a JPMorgan employee who paid tobacco surcharges and have questions about your rights, consult an employment attorney familiar with ERISA class action settlements. An attorney can assess your specific situation and explain potential outcomes.
Keep documentation of any tobacco surcharges deducted from paychecks or charged through benefits enrollment. These records may prove relevant if the case progresses to settlement.
Where to Find Verified Updates
For official case information, monitor:
- Court filings through PACER
- Announcements from plaintiff counsel
- Verified legal news sources covering ERISA litigation
Avoid relying on unofficial sources or social media for legal information about active litigation.
Frequently Asked Questions
What is the JPMorgan tobacco surcharge class action about?
The lawsuit alleges JPMorgan violated ERISA by charging employees who use tobacco an $80 monthly health insurance surcharge without providing a compliant wellness program that allows retroactive reimbursement after completing cessation programs.
Who can join the JPMorgan tobacco surcharge class action?
The proposed class includes individuals who paid JPMorgan’s tobacco surcharge for health coverage as active employees at any time from six years before the January 2026 filing date to the present.
Has JPMorgan settled the tobacco surcharge lawsuit?
No. The case was filed in January 2026 and remains in early litigation. No settlement has been reached or proposed as of this writing.
How much money could class members recover?
Unknown. The lawsuit seeks reimbursement of surcharges paid, but no specific settlement amount has been determined. Recovery would depend on litigation outcomes or potential settlement negotiations.
What makes JPMorgan’s tobacco surcharge allegedly illegal?
The lawsuit claims the surcharge violates ERISA because JPMorgan only waives future charges after employees complete cessation programs, without providing retroactive refunds for past surcharges paid during the plan year.
Are other companies facing similar tobacco surcharge lawsuits?
Yes. Since October 2024, at least eight major employers including Walmart, Target, 7-Eleven, and Campbell Soup have faced similar ERISA class actions challenging tobacco surcharge programs.
What should JPMorgan employees who paid tobacco surcharges do?
Keep records of surcharges paid through payroll deductions or benefits enrollment. Monitor the case for developments. Consider consulting an employment attorney if you have questions about your potential rights as a class member.
Last Updated: January 22, 2026
Disclaimer: This article provides general information only and does not constitute legal advice.
CTA: Have questions about ERISA class actions or employee benefits lawsuits? Stay informed about your rights by exploring our comprehensive guides.
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About the Author
Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
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