My employer canceled my insurance without notifying me, what can I do?

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My employer canceled my insurance without notifying me, what can I do?

My employer canceled my insurance that I paid 25% on weekly without notifying me. I was notified that the insurance would be terminated on April 3, but I received a letter from my health insurance that it was terminated on March 15. I went to the doctor March 18 under the assumption that I had coverage, and now I am left with a gigantic doctor bill. Weren’t they supposed to notify me? I would have held off on the doctor if I knew I was no longer covered.

Asked on May 8, 2009 under Insurance Law, Montana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

This is really an employment law claim. Employers have no obligation to offer a health insurance plan as a matter of law. If your employer were unionized and you are covered by a collective bargaining agreement there usually would be a negotiated contractual right to insurance. If your employer otherwise obligated itself to provide health insurance -- as here when it took money from your pay check to pay premiums -- there should be a contractual right that the deduction would be used to pay for health insurance. You could thus properly assume the insurance remains in force until notified to the contrary.

If your employer terminates a health plan, whether for financial reasons or because it has gone out of business -- and an increasing number of employees are doing that these days -- the coverage ends. Unless this situation is explicitly covered in the 2009 Federal Stimulus Legislation and the regulations thereunder [and I have not finished going through the new law or regs] there is little you can do except sue the employer and negotiate with the providers to have you pay what the coverage you thought was in place (and they agreed to accept from the health plan were it still in place) rather than the much higher "rack rate" they are probably trying to get from you now.


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