Can insurance premiums be deducted retroactively from an employee’s paycheck?

UPDATED: Sep 30, 2022

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Can insurance premiums be deducted retroactively from an employee’s paycheck?

My employer switched insurance providers at the end of last year, and failed to pay and submit paperwork on time for the new coverage. Due to this, last month (January) my entire company was uninsured, and one co-worker was actually turned away from a scheduled back surgery because of it. Now it is February and they found a company that would retroactively apply our insurance to list us as being covered since the beginning of January and my company let us know they would be taking backdated premiums out of our paychecks for coverage. Is that legal if we were not actually covered? For co-workers who are on additional disability time because of our employers mistake, are there any options to recoup the additional unplanned loss?

Asked on February 8, 2016 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

No, if employees were not covered during a period of time, they would not have to pay premiums for that period; but if they were covered, so that if they had incurred medical costs during that time, those claims would be honored, then they would have to pay for the coverage, even if they did not in fact use it. So the real issue is whether coverage is truly being applied retroactively, so that any medical expenses, claims, etc. during that period will be honored or whether it is not. If not, the employees should not pay.

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