Health Insurance Deduction Fraud

[NESSACAT]

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

My husband's employer was making deductions from my husbands check for family health insurance. My husband was hospitalized. The insurance company said we had no insurance because the employer failed to make premium payments. Do we have a case?

 

[ecmst12]

Only if the employer does not get the insurance re-instated or refund the money deducted.

 

[OHRoadwarrior]

It depends on the terms the insurance is provided to your husband under. Some employers will cover you for certain absences. Others terminate your coverage unless you work a certain amount of hours per week.

 

[cbg]

I don't think you're quite getting it, OH. The employer took deductions for health insurance out of the husband's paycheck, but did not forward them to the insurance carrier. That has nothing to do with the terms under which insurance was promised to the husband. That has to do with the employer violating the law. He cannot legally take deductions for health insurance and then not provide insurance.

If the employer EITHER makes retroactive payments to the insurance carrier so that the policy is reinstated, OR if the deductions that were taken for the purpose of providing health insurance are refunded, the employer is off the hook.

If, however, he does neither, then the husband does have legal recourse.

 

[OHRoadwarrior]

OK.
I was reading it that deductions come out each pay period. When OP was in the hospital, he did not have earned wages, thus no insurance payment was made for the time he was in the hospital and he then was uninsured.

 

[cbg]

That wouldn't be legal either. They can't have a group policy that's only in effect when you're working. And if it were legal, it would be one hell of a pain to administrate.

But in this case, the poster specifies that the cancellation was due to premiums not being submitted to the insurance carrier.

 

[ESteele]

As the earlier responders indicated, if the employer failed to send the deducted premiums to the insurance carrier, then the employer has the responsibility to endeavor to have the carrier retroactively reinstate the policy.

If the carrier refuses, the employer may remain liable for all of the medical expenses which would have otherwise been covered by the policy except for the employer’s failure to tender the premiums. The employer cannot escape this potential liability by refunding the premiums to the employee.

In sum, if the employer cannot straighten this situation out with the carrier, then the OP’s family should promptly contact a local ERISA attorney to explore suing the employer.

 

[OHRoadwarrior]

That wouldn't be legal either. They can't have a group policy that's only in effect when you're working. And if it were legal, it would be one hell of a pain to administrate.

But in this case, the poster specifies that the cancellation was due to premiums not being submitted to the insurance carrier.

I actually know of a company that has that. Employees must work 3 days to be covered for the week.

 

[cbg]

I would REALLY like to see their plan document. I will bet money that they are in violation.

 

[OHRoadwarrior]

I would REALLY like to see their plan document. I will bet money that they are in violation.

It is a union contract, voted on by the members. The union administers the plan and the company pays for it.

 

[cbg]

If I were the members of that union, I'd vote a change to that plan at the next available opportunity. What's the good of having a medical plan, if you can't use it when you're sick?

Union or no union, I still question the legality of such a set up.