My friend's employer told him his health insurance ends the day he quits. Is that legal? (see details)?

Question

My friend pays a monthly health insurance premium as a payroll deduction. He is considering changing employment and had been told that by his employer that the last day he works is the last day he's covered. My understanding is that when you pay your monthly premium you pay for a month of insurance. So is what they told him legal?

Answer 1

If it were an individual plan that would be true. Since you’re friend doesn’t have an actual policy (he’s a certificate holder, the company owns the policy), I’m not sure if the company can do that. I wouldn’t think so, but here are few links that might be useful:

State Insurance Departments
http://www.naic.org/state_web_map.htm
They should be able to tell you quickly if this is legal.

COBRA
http://www.dol.gov/dol/topic/health-plans/cobra.htm
Description of the rules for continuing coverage after leaving work.

State Employee Benefits Security Administration
http://www.dol.gov/ebsa/aboutebsa/org_chart.html#section13
State regional offices that help protect employee rights and benefits.

If you’re friend’s looking for a new health plan, try visiting MostChoice.com. It has free quotes and policy details like a lot of sites, but it also has a simple and effective way to get in touch with locally licensed health insurance agents. There’s no cost or obligation. All you do is fill out a short form, review some free quotes, and within 48 hours local agents will contact you to talk about what you’re looking for in medical coverage and what kind of price range you have. You just wait until one of the agents delivers a quality health plan at an affordable price.

You can find MostChoice here: http://www.mostchoice.com/health-insurance.cfm

Hope this helps,
Barnes@MostChoice

Answer 2

His health insurance will allow him to keep his insurance after he leaves the employer, however the employer does not have to contribute any money whatsoever to the plan. Even though your friend pays a "premium", I gaurantee he is not paying the hundreds of dollars that that insurance actually costs, because the plan is empoyer contributed.

Your friend may be paying his premiums on the month past, and not on the month ahead.

Yes he can keep his insurance, but his employer can stop paying for it immeadiately. He needs to speak with the insurance company. Not the employer.

Answer 3

I suppose it depends upon his work contract, how much of the premium he pays versus how much of the premium his employer pays. Ultimately though, I would agree with you about being covered till the end of the month, assuming the entire month's premium is paid at the beginning of the month.

When in doubt, your friend could always check with the insurance company that provides his health insurance. He can also contact the Insurance Commissioner for his state if he suspects foul play.

Answer 4

I'm not sure if that's legal, because I have always kept my insurance for at least the month after I've quit, but I do know that they are also required by law to give him the option of COBRA insurance (which is kind of expensive, so it's better usually to go through a private insurance company that offers short term insurance). I would recommend you have him call his insurance agency, because they would be able to give him the real deal - forget getting accurate info from the employer.

Answer 5

His coverage ends on his last day as an employee. He'll then be offered COBRA coverage, which he will have to pay both his share and the employers share in order to keep. Once he pays the COBRA premium, they will cover him from the his late date of work. So if he needs care between the quit date and the when he gets the COBRA paperwork, the COBRA will retroactively cover it once they get the premium from him.

Will he have coverage at his new job? Hopefully, since COBRA can be expensive.

Answer 6

Depends on state law and on the contract. In California you have the right to continue your employer's insurance for 30 days, provided you pay the premiums out of your pocket. Your friend needs to check with the human resources department, or with his union rep.

Answer 7

Assuming the whole months premium was deducted from his paycheck he should be covered until the end of the month.

If he wants to keep that coverage, and he should if he has any pre-existing conditions, he should ask for COBRA continuation coverage.

With a boss like that I wonder why he is leaving.

I hope this helps.

Answer 8

Employers provide employees with health coverage. When you are no longer an employee, they are no longer obglated to provide you with health insurance. However, they are obligate to offer you COBRA, which you have to pay for and which will be at a much higher premium.

Answer 9

My friend's employer told him his health insurance ends the day he quits. Is that legal? (see details)?

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Answer 10

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