What to do if your employer doesn’t pay its share of your medical insurance and you have a hospital bill?
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UPDATED: Jul 16, 2021
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While an employer does not have to provide health insurance in the first place, if they do elect to provide insurance, they must pay the premiums. If they don’t and you incur medical or hospital bills, you could sue the employer for the amount of the bills.
At the time of writing (September 2017), medical or health insurance is not required at work or from your employer–not even by the Affordable Care Act or ACA (also known as “Obamacare”). Employers can decline to provide health insurance, albeit sometimes (if they are large enough) at the cost of having to pay fines or penalties–though those fines or penalties are generally less than the cost of providing health insurance.
However, if an employer does provide health insurance, it must then pay for it. If it fails to do so, it makes itself liable for the costs (if any) you incur due to its failure to keep your insurance up. When you work for someone, you always work pursuant to a contract or agreement, even if it is an oral or unwritten one. The agreement is that you will work in exchange for certain, mutually agreed upon compensation. That compensation includes any health or medical insurance that the employer offered; when you work for someone providing health insurance, you do so at least in part for the insurance. Under basic contract law, when two parties (e.g., you and
the employer) agree to something (such as, “in exchange for working, you will get such and such salary/wages and benefits”), when one party (e.g., you) performs its side of the bargain (e.g., works), the other party (e.g., your employer) is then reciprocally obligated to perform its end of the bargain. In this case, to provide all the compensation, including health insurance, it agreed to provide.
Under contract law, the party that violates or breaches its contractual obligations–such as by not paying for the health insurance it agreed to provide– becomes liable, or responsible for, any reasonably foreseeable (or predictable) costs or losses the other side incurs. In case of health insurance, a reasonably foreseeable or predictable cost coming from a failure to pay the premiums for health insurance are medical or hospital bills.
Therefore, the employer’s failure to keep up the insurance or pay for it can result in the employer having to pay any costs or amounts which you have or had to pay out of pocket during the time your insurance had lapsed, if insurance would have paid those amounts had it been in effect. For example: say you have a $10,000 bill and would have had to pay $1,000 out of pocket while your insurance paid the other $9,000–the employer then could be liable for the $9,000 that insurance should have paid. If you’d had insurance, you would have “only” paid $1,000–the deductible or other amount not paid by insurance. Because you did not have insurance, you ended up paying the full $10,000, or $9,000 more than you should have. Because the employer’s failure to maintain your insurance caused you to pay an extra $9,000, you can seek that $9,000 from the employer.
Of course, if the employer will not voluntarily pay the amounts it should, you would have to sue your employer for the money, which has its own costs–so this is not a perfect solution. But it is better than not being able to recover your medical costs at all.