Terminated after being furloughed for months. Do I have to pay back health insurance premiums?

[Meteor196]

Hello, first post and AZ resident here.

Due to "economic downturn," I was furloughed from my company with no expiration date, and then was terminated from my position.
The company covered my health insurance premiums for the duration of the furlough and is giving me the option to have my premiums deducted from the lump sum offered in a severance package. Otherwise, I can take the full amount. Nowhere in the text of the severance package does it say that I am required to pay it and I cannot find any laws stating that I am required to do so. The only thing I can find is that I may not be eligible for coverage through COBRA.

Is this accurate? Am I at all responsible for paying back the premiums that were covered while I was furloughed?

 

[cbg]

What was said at the time you were originally furloughed? I think it is quite unlikely that the intent of the employer was that you would have your health insurance for free for that time. What would have happened had you been returned to work?

 

[Meteor196]

Had I returned to work, they probably would have taken it out of my paycheck. This wasn't possible during the furlough, of course, since they were not paying me. However, I am asking what I am required to do by law.

 

[Taxing Matters]

However, I am asking what I am required to do by law.

This isn't something that the law directly addresses, i.e. there isn't a law that specifically says that if an employer provides insurance during a furlough that you must pay that back. Rather, it is a matter of contract law. What was the deal you had for the insurance? If you were required to pay $X per month for the insurance and the company just wasn't collecting that during the furlough it could still insist that you pay it now.

 

[cbg]

This is a contractual issue. You are required to pay your portion of the insurance premiums unless the employer agrees to waive them. Since it appears the employer is not agreeing to waive them, you owe them now.

 

[Meteor196]

I don't believe there was a contract.

Here's what was written in an email from several months ago::

As a company employee on furlough, you will automatically continue your group benefit insurance programs. However, the employee premiums will NOT be payroll deducted during the furlough period. You will be responsible to pay your normal employee benefits contributions.

And in a document sent along with the severance package:

The chart below details the benefit(s) you are enrolled in, and the portion of the premium(s) you are responsible for
paying each month.

Not that it is relevant to this matter, but for context, they put me in a very bad spot by furloughing me (long story). I am leaning towards taking my entire severance package and not paying back the premiums unless and until it becomes apparent I need to. Is this advisable?

 

[LdiJ]

What was said at the time you were originally furloughed? I think it is quite unlikely that the intent of the employer was that you would have your health insurance for free for that time. What would have happened had you been returned to work?

I am confused by the fact that the company appears to be giving the OP the option of either paying for the retroactive premiums or not. What happens if the OP used the medical insurance during the furlough and then opts not to retroactively pay the premium?

 

[Meteor196]

I am confused by the fact that the company appears to be giving the OP the option of either paying for the retroactive premiums or not. What happens if the OP used the medical insurance during the furlough and then opts not to retroactively pay the premium?

Well, due to the covid restrictions and closures, it's not like I could have used any of the services anyway.

 

[LdiJ]

Well, due to the covid restrictions and closures, it's not like I could have used any of the services anyway.

Well, then if you didn't use any services why not just opt out and not pay them back?

 

[Meteor196]

Well, then if you didn't use any services why not just opt out

They made me elect whether to select healthcare a few days after I was furloughed. I initially opted in, thinking the furlough might last a month or two tops. Well, that turned into 6. Now that I've been let go, it'll expire at the end of the month.

and not pay them back?

^ Exactly what I'm thinking.

 

[PayrollHRGuy]

My bet is that they aren't going to pay you the severance without deduction unless you have paid the unpaid premiums.

Well, due to the covid restrictions and closures, it's not like I could have used any of the services anyway.

Well, then if you didn't use any services why not just opt out and not pay them back?

And both of those comments are ridiculous. I haven't used any benefits for my car insurance in over a decade or two. Should I get the insurance company to pay me back all of the premiums I've paid?

 

[LdiJ]

My bet is that they aren't going to pay you the severance without deduction unless you have paid the unpaid premiums.




And both of those comments are ridiculous. I haven't used any benefits for my car insurance in over a decade or two. Should I get the insurance company to pay me back all of the premiums I've paid?

You may find that ridiculous, however he stated in his original post that the company offered him that choice.

and is giving me the option to have my premiums deducted from the lump sum offered in a severance package. Otherwise, I can take the full amount.

So, unless the OP is not explaining things properly he appears to have that choice.

 

[Zigner]

You may find that ridiculous, however he stated in his original post that the company offered him that choice.



So, unless the OP is not explaining things properly he appears to have that choice.

The OP later clarified & contradicted that original statement.

Here's what was written in an email from several months ago::

As a company employee on furlough, you will automatically continue your group benefit insurance programs. However, the employee premiums will NOT be payroll deducted during the furlough period. You will be responsible to pay your normal employee benefits contributions.

And in a document sent along with the severance package:

The chart below details the benefit(s) you are enrolled in, and the portion of the premium(s) you are responsible for
paying each month.

The OP "opted in" to the coverage and was required to pay their portion for the health insurance. The company was very clear about it.

 

[LdiJ]

The OP later clarified & contradicted that original statement.





The OP "opted in" to the coverage and was required to pay their portion for the health insurance. The company was very clear about it.

Ok, I missed that.

 

[BuyLowSellHigh]

Don't count on being able to get your full severance without repaying the premiums that you owe. Especially if that will put you in a very bad spot again.