Can an employer cancel your health insurance in anticipation of the employee leaving for a new job?

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Can an employer cancel your health insurance in anticipation of the employee leaving for a new job?

Current employer was informed that employee would be leaving for a new job. There was no actual 2 week notice placed nor a final day of employment. The employee is still employed by the employer. The employer is claiming that he should have been a payment ahead on the policy but insurance company says he is behind and cancelled the insurance. Another employee of the same employer is claiming that their is not cancelled.  Also if no, what can be done about doctor bills acquired?

Asked on December 1, 2010 under Employment Labor Law, Pennsylvania

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

It appears this may be an issue between the labor board, the department of insurance, the employer and the former or current employee.  The insurance company (health insurance) cannot simply cancel insurance, but must provide per COBRA the notification the policy is going to cancel and offer the individual the option to continue on a COBRA plan (with the expected additional payments to be made by the employee).  This appears like it did not happen.  Further, the employer cannot simply cancel insurance in anticipation of the departure of an employee.  There are certain repercussions that come with it, including civil liability for retaliation.  It still would not be a different story if the individual was fired; COBRA should still be an option.  The labor board in your state may not like what occurred and this employee should either or both complain and file complaints with the labor board, the department of insurance and or the attorney general.  Further, written notification to the insurance company of its failure to properly cover the insured and dependants is one way to keep the paper trail of what happened intact.


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