Can an employer demand backpay on a health insurance for which it failed to deduct?

UPDATED: Oct 26, 2010

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Can an employer demand backpay on a health insurance for which it failed to deduct?

My husband started a new job back in 04/10 and we decided to switch from my employers health insurance program to his. We filled out all the necessary paperwork, received our cards, and thought all was well. Now, he’s been told they weren’t deducting the amount all this time and want us to pay it all in a lump sum or they will garnish his wages. Is this legal, when it was their error? Also, we have not submitted a claim since switching over.

Asked on October 26, 2010 under Employment Labor Law, South Dakota


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

1) They can require you to pay the money you should have paid all along. Assuming they are correct in the sum that should have been deducted, your husband is obligated to pay it contractually for the insurance. If that seems unfair, consider: if they took out too much money, you'd expect to get the excess refunded, correct? It's the same idea. Regardless of who's error, you owe the money. Also, it doesn't matter whether you've submitted claims or not--the insurance premiums have to be paid, and the employee contribue his share, regardless of number of claims.

2) An employer cannot generally garnish an employee's wages without the employee's permission--though since an alternative would be for the employer to potentially fire and/or sue your husband (fire, if he does not have a contract--he's then an employee at will and can be pretty much fired at any time, for any reason; sue because he owes money), it may be best to work out a schedule allowing them to take the money out from paychecks over time.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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