Employer stealing from you? Not forwarding health premiums
Even though the recession ended in 2009 (year right), people are as deperate as ever. Not only are employees stealing from employers, employers are getting into the act. Not the smartest logn term move.
What happens when an employer gets premiums from an employee specifically for health insurance, and pockets them? The company owner does not forward the premiums to the health insurance company, but deposits or cashs them, resulting in no coverage for the employee, or former employee if you are on COBRA.
BTW, I'm not a lawyer and don't take this as legal advice. Below is my opinion and a summary of what I have learned and observed.
Some employees consider it stealing if the employer refuses to refund a portion of their health insurance coverage after the employee voluntarily unenrolls. That is not theft, since IRS rules are very strict on refudning pre tax contributions. Check your plan rules (see Summary Plan Description) to see on what exact day of the month coverage will end when you unenroll.
When I refer to emploer theft, I am talking about misappropriation, or an employer not forwarding monies due for a group health plan, where the employee thought he was enrolled and beliveded you were covered by the group health insurance.
If the copany is only making partial payments, it can also cause you to be retroactively concealed, so if you had coverage, you no longer have it. In addition, any medical care that you recived that you thought was covered, may be denied. When you recieve medical care, you are financially responsible for the premiums, so you may end up getting calls and letters from bill collectors working on behalf of your doctor.
You also want to figure who took the money. The thief could be the owner of the company, or maybe it's person who heads accounting. You don't want to burn any bridges, especially with people that can help you. Remember that the company is ultimaley response for the actions or inactions of it's agents and employees.
It can be a real Pandor's box for the employer. Get a consulation from an attorney who specializes in "Breach of Contract." Your enrollment paperowrk was actually part of a cotnract where you promised to pay and the employer promised to forward the premiums. They did not meet their end. It might even become a class action, depending on how many other employees they cheated.
With Employer theft, there is usually a good paper trail. Call or write the health insurance carrier and request for copies of all letters submitted to your employer regarding the employer failing to pay accounts in full. Don't tell the health insurance company you are suing the company or they will send it to legal and request a subpoena. This is a chance for you to get the info and avoid some of the fees.
Of course, have copies of checks you send to the employer, front and back to show they endorsed them and where the deposts went to. It will also give you something to show your doctor, so they may delay collections or work out a payment plan while continuing your care.
The theft of your health insurance premiums by your former company might negate your eligibility for COBRA. Look your former company up on google, glassdoor.com, the BBB or rippoffreport.com see if they have ripped off others.
Contact the DOLM
Employee Benefits Security Administration toll free number at 866-444-3272. Their website is www.askebsa.dol.gov.
You have to be proactive when it comes to employer theft because many companies are closing
down or filing for bankruptcy protection. Local law enforcement may consider it a civil issue, so dialing 911 may not work. When a company closes it's door and ceases to exists, you have to go after the owners. If a company filies BK, it depends on the type of bankruptcy they are filing if they are dissolving or reorganizing.
Fraud is not something protected by bankruptcy, however my experiance is that trustees and judges have a "so what" attitude and if you file a claim against the company in bankruptcy, become a creditor, it's almost accepted that you will be burned. You then have to file an AP or adversarial proceeding against the company and explain why your judgement should not be discharged.Written by Craig J. Casey
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
