Can an employer change insurance companies knowing that an employee has a terminal illness?

UPDATED: Apr 5, 2019

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Can an employer change insurance companies knowing that an employee has a terminal illness?

My brother-in-law was diagnosed with terminal cancer in July of last year. His employer changed insurance companies in January and he passed away in March. Now, the new insurance company won’t honor his terminal illness claim saying that it was pre-existing. Is this legal?

Asked on April 5, 2019 under Employment Labor Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, it is legal. The employer provides insurance--if it chooses to provide insurance; remember: insurers may choose to not provide insurance at all--voluntarily, as a benefit to employees. It does so for its own purposes (e.g. to reward or incentivize employees) and is not required to take employee needs or situations/circumstances into account. That means it is free to change insurers, such as to reduce costs, improve customer service, or for any other reason. If your brother wanted insurance under his control, he should have purchased and had his own insurance. Instead, he relied on insurance provided by another.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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