What to do if my employer has been deducting from my paycheck for health benefits but my benefits have been terminated by the insurance company for nonpayment?

UPDATED: Mar 15, 2014

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What to do if my employer has been deducting from my paycheck for health benefits but my benefits have been terminated by the insurance company for nonpayment?

I have pay stubs to prove they have taken the money and a termination letter from the health insurance company with the termination date. I have also received notices that my claims for my pregnant wife have not been paid for both this and last month; I just received the letter from the health insurance company. I am not the only employee who is dealing with this, as I know of one other employee that had received the letter. What can I do to get what is was supposed to be paid for or at least get my money back?

Asked on March 15, 2014 under Employment Labor Law, Pennsylvania


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

If an employee discovers that their employer failed to provide health insurance after the employee paid their portion of premiums, they have legal recouse against that employer. The employee can do several things. First of all, they can sue for damages in the amount of the premiums paid by them and be entitled to additional damages if they attempted to file a claim with their insurance company while they believed they were receiving coverage and were then were denied. These additional damages can include the cost of any procedures and other expenses, as well as possible punitive penalties. Furthermore, an employer who falsely tells their employee that it is providing coverage when it is not and but who has collected the premiums is committing fraud. In such a case, the employer could face a fine and/or jail time if found guilty of the charge.

At this point, you should consult with a local employment law attorney for further advice.

Anne Brady / Law Office of Anne Brady

Answered 9 years ago | Contributor

Your employer may have been deducting money for your portion and failing to pay his portion.  Or even worse, he was deducting for the full cost and keeping the money for himself, failing to send it on to the insurance.  Your only claim now is against your employer.  You can not force the insurance company to pay claims when premiums were not paid to them.  The employees have a viable claim for fraud against the employer.  They should go as a group to a lawyer, who will send the employer a demand letter on their behalf, and if necessary sue the employer.  Of course, you may lose your jobs, but if this is what has been going on, it is unlikely you would have had jobs much longer anyway.

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 AttorneyPages.com 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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