What recourse do we have if my wife gave birth this summer and she was told by her employer that she had medical insurance, however she did not although premiums had been deducted from her paycheck?

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What recourse do we have if my wife gave birth this summer and she was told by her employer that she had medical insurance, however she did not although premiums had been deducted from her paycheck?

She was not paying premiums of of her checks her employer was covering the premiums; I believe it’s called employer sponsored. Little to our knowledge, or anyone’s knowledge at the school, the owner was not paying the premiums to the insurance company and the insurance was cancelled in January. On my wife’s pay stubs from January-July it states that the company was paying medical but in reality they were not. We are now receiving bills from hospitals and doctors offices for all the pre and post appointments. Are bills are now in total $50,000. Do we have any legal action against her employer?

Asked on October 24, 2015 under Employment Labor Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

You can sue the employer for your wife's medical costs: you only incurred those costs due to the employer doing one or more of a) negligently (carelessly) failing to pay for insurance; b) intentionally pocketing your wife's (and other employees?) premiums (the payroll deductions) without in turn paying for insurance; c) violating the contract or agreement (even if only oral) that in exchange for working, your wife could get health insurance. That's the good news--based on what you write, you have a cause of action against the employer. And if the company were a sole proprietorship or partnership (not an LLC or corporation), you can sue the owner(s) personally.
The bad news: 
1) You and wife are liable for the medical bills; even though you have a claim vs. the employer, the medical care providers are entitled to seek payment from you, and can sue you for the money if you can't pay.
2) If the employer was an LLC or corporation, you can only sue the company itself--and if the company is insolvent (e.g. if the reason it wasn't pay was financial distress or embezzlement), you may not be able to recover anything.


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