Can a company cancel health insurance when an employee has an illness because the penalty is cheaper?

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Can a company cancel health insurance when an employee has an illness because the penalty is cheaper?

Asked on March 7, 2013 under Employment Labor Law, Ohio

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The company cannot cancel the health insurance, assuming the employee has paid his/her premiums (employee share), during the term of the contract--for example, until the new open enrollment period. However, during the open enrollment period or any other time when the company may legally change its coverage, it  could elect to stop providing--or cancel--health insurance. That's because the law does not actually require companies to provide health insurance; the Obama health care law will give them the choice of providing health insurance or paying a penalty, but they are free to choose the penalty. The fact that the employee is sick is irrelevant; a company is not obligated to provide or continue health insurance because an employee may need it.


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