Only 1 employee excluded from health insurance

[VirginiaMom]

What is the name of your state? Virginia

Small company, owner Nancy and 3 f/t salaried employees. Sally has been there 5 years. Nancy hired Ben a year ago and offered to provide health insurance (a benefit never before available) if Ben paid 100%. Sally was offered insurance at that time, if she paid 100%, which she could not afford. Ben elected instead to secure health insurance thru his wife, and for some reason the owner began reimbursing Ben 100% of that cost. So, Ben has received his insurance paid through the company for the past year. Sally had no health insurance.

A week ago, the owner hired emp #3, Amy, and secured a new health insurance policy for herself (Nancy) and Amy, with the company paying 100% of their premiums. This was not offered to Sally in any form. Sally still has no health insurance.

All employees do the same type of work, i.e., sales, contracts, and customer service, but Sally also does bookkeeping.

The newer employees earn significantly higher salaries than Sally, and are given additional benefits that Sally is not (extra paid vacation time, shorter days, and paid holidays, meaning that although Sally is salaried too, she is expected to come in on holidays).

Obviously Sally needs a new job! But for now, does Sally have the right to receive insurance with 100% paid by the company, since all other employees receive this benefit? Is not offering her this a form of discrimination?

Thanks so much for your help.

 

[cbg]

Has Sally asked why she was excluded? If so, what was the answer? If not, why not?

 

[VirginiaMom]

Thanks for the reply. Next on her agenda, based on researching other questions here, is a written memo to the owner asking about her eligibilty for health insurance coverage. I think she just wanted to know her rights, should she be denied (which is probable based on history, just like vacation dates being denied). Hopefully the denial will at least be in writing and with an explanation. Back to her rights (should that be the case) -- if anyone knows of Virginia law or a site to check I'd be most appreciative.

 

[moburkes]

With such a small company, I don't know that employer is REQUIRED to offer it. However, let cbg come back to respond.

 

[cbg]

Regardless of the size of the company, the employer is not required to offer health insurance at all (the only state where health insurance is a mandatory benefit is Hawaii, and not always there).

However, since the employer has chosen to offer health insurance, they must follow whatever the eligibility rules are in the SPD. That does NOT mean that all employees must be offered it if it's offered at all; it is quite legal to set up eligible "classes" of employee and only offer it to employees in the eligible classes. Common eligibility classes are: full time but not part time; office but not shop; employees in the corporate offices but not employees in the field offices; employees hired before a certain date but not after a certain date: managers and supervisors but not below that level, etc. It is a myth that if a benefit is offered, all employees without exception have to be offered it; all employees IN THE ELIGIBLE CLASSES have to be offered it without exception, but it's legal for some employees to be ineligible.

IF it should happen that for some reason Sally does not fall within the eligible classes, she does not have to be offered it, regardless of the fact that all other employees are covered. However, from your description, I find it hard to believe that she will not. Since they all do the same kind of job, it can't be based on her job duties. It would be legal to offer it only to employees who do not have access elsewhere, but since Ben is getting insurance paid for, that's not it. It would be legal to grandfather only the employees initially covered, but since Amy was offered it, that isn't it. It COULD legally be only employees hired after a certain date (quite unfair, and quite unusual, but if it says so in the SPD it's legal) but I think the fact that Sally was initially offered it and declined it, that's unlikely to be it either.

One thing to keep in mind. Since Sally initally declined the insurance, Nancy may have neglected to offer it simply because she didn't realize Sally would be interested under a different payment structure. If that is the case, she may be perfectly happy to include Sally. HOWEVER, even if Nancy's inital response is, "Sorry, Sally, I didn't realize you wanted it, of course you can have insurance", the same SPD may, and very likely will, only allow additions at certain times of the year. So it may well be that Sally will have to wait until an open enrollment period to join.

In any case, Sally needs to talk to Nancy.

I'd be interested in hearing the follow up to this one, and will be happy to help further if needed.

 

[VirginiaMom]

Thank you, CBG. I will follow up as more becomes known.

Sally did ask Nancy this afternoon via a written memo, and got just a blank stare in return -- not a good sign. In the meantime, I had already called the VA Bureau of Insurance on behalf of my sis Sally, and was told the same thing as the advice here - Sally should make the request of Nancy. The VBI rep recommended that Sally write down whatever response Nancy gives her, and said Sally should ask to see the written policy if Nancy says Sally is ineligible. If that happens, the VBI rep also suggested that (based on her understanding of these circumstances and what she found in the Virginia law she was looking at), Sally file a complaint if insurance is denied her.

Until Sally gets a response from Nancy, that is where things stand.

 

[cbg]

I agree with the VBI representative in all respects.

Please keep me posted.

 

[VirginiaMom]

Update: The day after Sally gave Nancy a memo requesting insurance coverage (and got no response at all), Sally heard Nancy say loudly on the phone to the insurance agent, "It's going to be just Amy and me, and that's all it is ever going to be!" Nancy reiterated that statement in person to the insurance agent the following day, once again seeming to intentionally do so in Sally's presence.

Sally has already started the complaint process with the state Bureau of Insurance, since it seems pretty obvious that Nancy is unwilling to offer her insurance. Nancy is aware that Sally is a cancer survivor; I do not know if that is a factor in her attitude. I also don't know how health insurance companies handle cancer, but the VBI lady had read me a clause that says "No eligible employee may be excluded or charged additional premiums because of health status."

Any advice / thoughts would be most appreciated.

 

[cbg]

Sally is doing the right thing in filing a complaint. About the only other thing I can think of is to give the insurance carrier a call and ask them to confirm what the eligibility requirements are. It may help her claim if she knows that.

Nancy MIGHT legally be able to get away with only covering herself and Amy IF she were not paying for Ben's insurance through his wife's carrier.