HEY! Can they do that?

[flitboy]

What is the name of your state? Arizona
The small telecom company I work for was bought by a management group from Atlanta, GA last July. On July 29th, I was notified that the new owners would be canceling my health insurance as of August first. They also stated that the management company would be changing thier health insurance carrier and did not want to put the new employees on the old plan just to change them within a couple of months.
We were given the option to use Cobra to give us coverage until the new policy kicked in.
I just recieved word today that they will not reimburse any money paid to Cobra but the new employees will be eligible for the new carrier on October first.
I feel that this is a form of discrimination, since the current employees were provided with health insurance and the new employees were not.
Having four teenagers, I have to have health insurance.
I can not afford the $850 to pay Cobra.
What can I do?

 

[cbg]

Come up with the money, or go uninsured.

This is bad management, but it is not illegal.

 

[ALawyer]

If you don't have the COBRA check to make sure you won't have a waiiting period for pre-existing conditions on the new plan....

 

[CIAA]

Hmmmmmm.....sounds a bit shakey to me!

Once you become an eligible employee of the new company and you qualify for their plan in accordance with the terms of their group policy and want to enroll, I have to think that it would be an ERISA violation to refuse to enroll.

It is true that an employer can terminate coverage at anytime but that doesn't seem to be the case here.

Let's suppose I can't afford the COBRA, was denied enrollment under the new company's policy because they didn't want to handle the admin. costs, 60 days later (before being allowed enrollment in the new company's existing group), I have a stroke, and now I cant qualify because I'm not working.

Sounds like the new employer is "rolling the dice" with the employees bearing all the risk and downsice. I think it's a violation at this point.

Employer coverage is not regulated by the state, the DOL has enforcement action over these plans. If you want to inquire further contact their HELP line at 1-866-4-USA-DOL

 

[cbg]

Good point, CIAA, I've been out of the insurance industry long enough now so that I sometimes forget about ERISA.

However, I think it will depend on whether there is a waiting period defined in the policy. If there is, and if it is as long as two months, the company may have an out as technically, these are new employees for them.

Of course, what should have happened is that they should have not cancelled the old policy until they were ready to take the employees on the new policy. But as I said in my first post, bad management is not illegal.

It's certainly worth a call to the DOL. Good luck to you, flitboy, I hate it when employers do things like this; it gives all of us a bad name.