Employer not paying insurance premiums, making 401k deposits etc

[robinski3]

What is the name of your state (only U.S. law)? Louisiana

My employer is often late (2-3 months) in paying insurance premiums and making 401k deposits. I'm not positive he is ever paying for disability and life insurance, since I have no proof of coverage of those items. So I have a few questions.

Is it legal for him to use money withheld from my check for insurance, 401k, etc to pay his bills? If not, just how serious is this - is it worth pursuing?

Legally, does he have to show me proof of life insurance and disability insurance coverage? Right now I think I am most concerned about the life insurance -- if something were to happen to me, I don't think my spouse could fight the battle with my employer. (I'm fine, just like to keep things organized!)

And lastly, I know that health insurance gets reinstated and bills paid when he has let it lapse -- will life insurance work the same way? If I died during a lapse in coverage, is it "too bad so sad" or will they reinstate and pay?

Thanks!

 

[ecmst12]

The MOST concerning item is the 401k deposits. That is the kind of thing that can get him sent to prison.

 

[pattytx]

The employer doesn't have to show you "proof" of anything. Failure to forward 401K funds at least monthly is an ERISA violation and for that, you can report the employer to the federal Dept of Labor.

 

[ecmst12]

If you are concerned about having life insurance, you can purchase a policy for yourself. If you are relatively young and healthy, it should be cheap.

 

[robinski3]

I'm older, and actually let my personal policy lapse because of the expense. So I've put a lot of my eggs in this one basket, and starting to worry about it.

I was just posting here to try to educate myself so I could sound a little bit threatening when I talk to the HR person about it. I know legally they don't even have to provide benefits, but it bothers me that the money is withheld from my check (ergo "my money") and that it isn't then spent the way it's supposed to be in a timely fashion. I was hoping there was something more than just a little bit wrong with that, so they'd be worried and do the right thing if they thought employees would go to the Labor Board about it. (I'm not the only person concerned about all this, but I've been elected the one to do something about it!)

 

[cbg]

I would suggest that if you are that concerned, you call the carriers of the disability and life insurance companies and ask them if the policy is in force. Because if you go to the employer and "threaten" them (or even just sound threatening) and it turns out that all the payments have been made, someone is going to be in serious trouble and it ain't going to be the employer.

I'm not making light of your fears but you need some evidence before you make accusations, threats, or even threatening questions.

If the policies are all in effect, the only one where there might be any legal issue is the 401k. That one has some very sharp teeth. Employers can go to jail for not making payments. But note that there is a very real difference between not making payments at all, and making payments late. Employers go to jail for not making payments at all; they get a slap on the wrist, are told not to do it again, and probably pay a fine for making payments late. And believe me, the IRS knows already if they are making payments late; no one has to draw the IRS a diagram. Trust me on this.

There are no legal penalties for making late payments for the health insurance, life insurance, or disability plan, as long as the carriers are willing to accept the payments and reinstate the plan, if canceled. If the carrier is NOT willing to accept late payments and/or reinstate the plan, then the only legal issue comes into play if the employer refuses to return any premiums that you may have had deducted. If the policy is canceled, the carrier refuses to reinstate, and the employer returns all deducted premiums, all is well as far as the law is concerned.

The above presumes that no legally binding and enforceable contract guarantees such benefits.

 

[robinski3]

That's more or less what I figured, but was hoping I was wrong. I do plan on calling the carrier - I had emailed them already without a reply. For me, the concern is the life insurance. I can make a stink about the other stuff (ie if I go to doctor and find out coverage has lapsed) but I won't be around to make a stink about the life insurance!

Thanks for the info.

 

[eerelations]

If you are concerned about having life insurance, you can purchase a policy for yourself. If you are relatively young and healthy, it should be cheap.

The OP's not so copncerned about having life insurance as he is about his money being taken from his pay and being spent on something other than life insurance.