Lawsuit claims Casey's exploits its employees

Casey's General Store is being sued for allegedly exploiting its workers through the discriminatory practice of imposing a tobacco-use surcharge for health insurance coverage.

The surcharge, which is alleged to be $35 per pay period, amounts to an illegal "cash grab" by Casey's that is masquerading as a wellness program, the lawsuit claims.

Filed in U.S. District Court for the Southern District of Iowa, the lawsuit seeks class-action status but is currently filed on behalf of one Casey's employee, Elizabeth Blalock of Carroll County, Missouri.

Attorneys for Blalock allege that all Casey's workers are automatically assumed to use tobacco unless they submit to a process in which they provide a sworn affidavit stating they do not. Any worker who fails to complete that process by a specified deadline is then required to pay "tobacco surcharge" for the entire calendar year, even if they do not use tobacco, the lawsuit claims.

In addition, Casey's allegedly fails to provide the federally required options that would allow employees to avoid the surcharge. "The surcharge is structured as a penalty rather than a legitimate wellness incentive," the lawsuit claims, since the workers "who miss the enrollment deadline are penalized for the entire year without any opportunity to later demonstrate compliance or avoid the surcharge."

The lawsuit is based on the requirements of the Employee Retirement Income Security Act of 1974. ERISA allows employers to deduct from workers' pay a tobacco-use surcharge, but only in connection with wellness programs that meet specific federal guidelines established in 2014.

The lawsuit alleges Casey's is illegally shifting the costs associated with less healthy workers from the company back to those same workers "who end up subsidizing their healthier colleagues."

Blalock has forfeited to Casey's $35 in earnings per pay period — roughly $910 per year — in order to maintain health coverage through the company.

The plaintiff is represented by attorney Adam J. Wachal of the Koley Jessen law firm in Omaha.