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Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5299
Experience:  Extensive experience representing employees and management
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Can our medical insurance through my husbands employer be

Customer Question

Can our medical insurance through my husband's employer be canceled without notice due to lack of payment of premium? While his was out on workers comp we were paying the insurance through an independent agency. There was a $12.58 balance and they canceled us.
Submitted: 4 years ago.
Category: California Employment Law
Expert:  Joseph replied 4 years ago.

Hello and welcome to JustAnswer.


I'm sorry to hear about your situation and hope I can help.


Have you contacted the independent agency you were using about the payment not going through?

Customer: replied 4 years ago.

They received the payment late. I have contacted my husband's company and was told they would not reinstate our insurance and we would have to wait until open enrollment which leaves our family uninsured until Jan. 2014. I was told my the US department of labor that the only thing I can do is write a compassion letter to the company to plead our case. Is this legal?

Expert:  Joseph replied 4 years ago.
Hello Annette,

Unfortunately, it is legal for an insurance company to cancel your insurance if it doesn't receive payment when it's due (even with a ridiculously small amount owin), unless the terms and conditions of the policy state otherwise.

The insurance company can do so without any prior notice to the insurer that the payment is late, since technically a late payment 'breachs the contract.' So unfortunately your only primary 'recourse' with your husband's company and the insurance company and your husband's company is to write a letter of compassion to plead your case.

However, if you had an arrangement with a third party agency that they were to take care of your your insurance payments through money that they sent you and they failed to do so then you would have a cause of action against them for breach of contract and negligence for failing to provide the payment to the insurance company on a timely basis inorder to ensure you would have continued coverage.

You can also call the insurance company to see if they would consider reinstating your husband's insurance or provide you with 'gap' insurance to cover the time that he may be uninsured due to the gap in coverage.

Unfortunately, this is one of many times that I have to give someone bad news on this site, and I really disagree that this is the case. Also, things will definitely be different in the beginning of 2014 when Obamacare is inititiated, but, unfortuantely, at this time an insurance company is allowed to cancel an employee's insurance policy for nonpayment of premiums without notice.

I would also encourage you to continue to pursue your compalints against the insurance company with the California Insurance Commission. You may also consider filing a Better Business Bureau complaint and contacting the Attorney General to see if they can assist you in dealing with this incredibly unfair, but unfortunately legal matter.

I, of course, sincerely wish I had better news to give you, as logically this type of thing definitely should be illegal, but unfortuantely I can only tell you what the status of the law is, not what it should be.

Finally, if your husband believes that the insurance was canceled due to discrimination against him due to his worker's compensation claim or being disabled, he can sue for retaliation and discrimination in violation of the ADA and Fair Employment and Housing Act.

Please let me know if you have any follow up questions.

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Thanks and best of luck!

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