Carswell v. Regions Financial Corporation, et al.
| Case number | No. 3:26-cv-03016 |
|---|---|
| Court | U.S. District Court for the Middle District of Florida |
| Filed | November 2, 2026 |
| Defendants | Regions Financial Corporation, Regions Bank and John Does 1 to 20 |
| Law | Employee Retirement Income Security Act (ERISA) |
| Status | Complaint filed. No class certified and nothing to claim. |
A Regions Bank employee has filed a proposed class action claiming the bank charges workers who use tobacco or vapes an extra $390 a year for health insurance without giving them a lawful way to avoid the fee. The 54 page complaint, filed November 2, 2026 by plaintiff Dawn Carswell in federal court in Florida, says the surcharge violates the federal ERISA wellness program rules.
Key takeaways
- The lawsuit targets a $390 a year surcharge on Regions health plan members who use tobacco or vapes.
- It claims Regions’ enrollment guide showed two rate tables but no way to avoid the charge.
- It is one of more than 80 similar tobacco surcharge lawsuits filed against U.S. employers.
- Regions has not responded in court, and the claims are unproven.
What the Regions Bank tobacco surcharge lawsuit claims
According to Bloomberg Law’s report on the filing, Regions’ benefits enrollment guide listed two premium rate tables, one for tobacco users and one for non users, and did not mention any alternative program that would let tobacco users avoid the higher rate. The complaint says that setup breaks ERISA, which allows employers to charge tobacco users more only through a wellness program that meets specific requirements.
The suit names Regions Financial Corporation, Regions Bank and 20 unnamed defendants. It was filed as a proposed class action, which means Carswell is asking to represent other plan participants who paid the surcharge. The plaintiff is represented by Milberg PLLC. Regions had not filed a response at the time of publication.
What federal law says about tobacco surcharges
Employer health plans can charge tobacco users up to 50% more for coverage, but only through a health contingent wellness program. Under the Labor Department regulation at 29 CFR 2590.702, a plan that uses a tobacco surcharge must:
- Offer a reasonable alternative standard, such as a tobacco cessation program, so members can earn the lower rate without quitting immediately.
- Make the full reward available to everyone who meets the alternative.
- Describe the alternative in all plan materials that mention the program, with contact details and a statement that a personal doctor’s recommendations will be accommodated.
Lawsuits like this one usually argue that the plan skipped one of these steps, most often the notice requirement, or that members who complete a cessation program should get back the surcharges they already paid that year.
How similar tobacco surcharge cases have turned out
Regions is far from alone. Plan members have filed more than 80 tobacco surcharge suits against employers, with more than 30 filed since January 2026, according to Groom Law Group. Courts are split. In July 2026, judges dismissed cases against Target and Campbell Soup, finding that ERISA does not require retroactive refunds of surcharges. Other courts have let cases move forward, and in October 2026 a Missouri federal judge granted summary judgment to workers in a case against Compass Group USA. Appeals are now pending in the First, Second, Sixth and Seventh Circuits, so appellate rulings in 2027 could shape how the Regions case ends.
Several earlier cases have also settled. One Virginia tobacco surcharge case, for example, ended with a $4.7 million class settlement that received final approval in May 2026.
What Regions employees can do now
There is nothing to sign up for or claim at this stage. If you are or were on a Regions health plan and paid the tobacco rate, keep your pay stubs, enrollment guides and any wellness program notices, because they show what you paid and what you were told. In most class actions you are included automatically if a class is certified, as our guide on how to join a class action lawsuit explains. We will update this story when Regions responds or the court rules. For the full case background, key dates and what to do if you want to seek lead plaintiff status, see our Regions Bank tobacco surcharge lawsuit page.
Frequently asked questions
What is the Regions Bank tobacco surcharge lawsuit about?
It claims Regions charges employees who use tobacco or vapes an extra $390 a year for health coverage without offering and explaining a lawful way to avoid the fee, in violation of ERISA.
Is there a Regions Bank tobacco surcharge settlement?
No. The case was filed on November 2, 2026. No class has been certified and no settlement or claim form exists.
Can employers legally charge smokers more for health insurance?
Yes, up to 50% of the cost of coverage, but only through a wellness program that offers a reasonable alternative, makes the full reward available and discloses the alternative in plan materials.
Which court is hearing the Regions case?
The U.S. District Court for the Middle District of Florida, under case number 3:26-cv-03016.
