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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 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.


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