Does an employer need to formally notify you of insurance termination?

UPDATED: Feb 13, 2012

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Does an employer need to formally notify you of insurance termination?

I needed to have emergency surgery on the 4th of last month. I found out 2 weeks later that my former employee terminated my insurance on the 31st of the month prior without notifying me. Now I am receiving medical bills for upwards of $16,000.

Asked on February 13, 2012 under Employment Labor Law, Pennsylvania


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If the employer terminated your insurance without notice, it may be liable for your medical bills under one or more of the following theories:

1) If you were complying with your obligations (e.g. paying your share of the premiums; employed there), then it may be breach of contract for them to terminate a benefit you pay and work for.

2) Even if it would not be breach of contract, you were reasonably relying on the provision of insurance, something your employer wanted you to rely on (e.g. it's presumably part of the compensation or benefits package which incentivizes you to work) at that time. When someone reasonably relies on a promise (e.g. of insurance coverage) which another intends on him to rely, that reliance may make the promise enforceable under the theory of "promissory estoppel."

3) It may also be a violation of the agreement between you (as the insurered) and the insurer for the employer to terminate the coverage without notice (depends on policy terms); if it is, the employer could be liable for that either as a party to the agreement or potentially (if it's not deemed a party to the actual agreement between you and the insurer) for tortious interference with a contract.

Therefore, depending on the exact facts, terms of the insurance, etc., there are several possible grounds to hold your employer liable. If the employer will not voluntarily pay, you would need to sue for compensation; you should speak in detail about the situation with an employment law attorney.

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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