Is it illegal for an employer to stop paying health insurance premiums for their employees?

December 7, 2011 in Member Stories

My mother’s workplace is plagued by poor management and a lack of professionalism. The thing that scares me the most is that about every three months she will receive a notice from her health care provider indicating that she is not under their coverage. The notice will state that the employer has not paid their health insurance premiums and as such the employees have not been covered for a period of time which usually spans about a month.

I’m fairly certain that this is illegal, as it is stated in the employees’ contracts that they will have health benefits including health insurance.  My ultimate concern is that my mother will need medical attention during a lapse in coverage and then be fit with a massive bill. Before having to face this situation I wanted to reach out to the group to see if a) this is illegal as a breach of contract, b) what are employer’s responsibilities to provide health insurance and c) how to remedy this situation?

I really believe the best thing would be to leave this employer all together, but for whatever reason she does not want that. Any input/advice would be greatly appreciated.

7 responses to Is it illegal for an employer to stop paying health insurance premiums for their employees?

  1. Hi Dylan – great question. I’m sorry your mom is having this trouble. It sounds unsettling to say the least.
    I sent a message to the Division of Insurance and to the AG’s office – I’ll let you know what I hear.

  2. @martha @dylan
    what state are we talking about here? what kind of “employee contract?” Union or personal services? What kind of “health benefits including health insurance” does the contract say she is entitled to? Employee contracts are rare in the northeast U.S. and — where they exist — are usually cookie-cutter things totally written in the employers’ favor in terms of such things as 1-year non-compete restrictions on the employee vs. the employers right to fire at will. This sounds more like a contract/labor law issue than an insurance issue. Your first instinct is the right one: she should find another employer (easier said than done in this economy of course)

  3. Dylan – I got a call from the AG’s office in MA – they suggest that you or your mom call their health care consumer hotline, 1-888-830-6277. Apparently there is not a simple answer to your question about whether this practice is illegal. Let us know what you find out!

  4. question: received insurance under a premium rate of 35.50. However months later noticed that I barely have a paycheck. They stopped paying their part of the insurance. No notice or anything. Would have checked into it sooner. However, they provide a check mainly or by internet. You have to request them. Of course I have other deductions coming out & they cut my hours due to company being slow. Now I go to cancel insurance & they will not let me. Come to find out I’ve been paying out 170.00 a week for insurance when supposed to be no more than 45.00 a week. Anything I can do know. Insurance company says it’s because I’m not part-time status.
    They haven’t paid their part.

    • Brittney – sorry – I’m not sure I understand your situation. I assume it was your employer who stopped paying their share of your insurance premium? Did you contact HR? What state do you live or work in?

  5. Is it illegal for the union to cancel your health insurance. While you are on strike

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