About Us  |  About Cheetah®  |  Contact Us

Scary healthcare scenario: companies drop insurance, don’t tell employees

March 3rd, 2010  |  Connie Eyer

>In an environment in which small business owners are struggling not only to meet payroll, but also to pay for employees’ increasingly expensive healthcare premiums, a disturbing practice has been reported as being on the rise: companies that drop employees’ healthcare coverage, but don‘t bother to tell them.

In a newsobserver.com article, Kristin Milam of the North Carolina Department of Insurance noted that NC state law requires that companies give their workers 45 days’ notice if they’re going to drop coverage. According to Milam, employees of businesses that don’t follow the law often find out their coverage has lapsed until they go to the doctor’s office.

One high-profile case mentioned in the article was that of the CEO of Pace Airlines, Charles Rodgers, who was charged with terminating health insurance premiums for his 337 employees without warning. In North Carolina, Milam said, when the insurance department gets such a complaint, investigators give the employer a chance to reinstate the insurance and cover the back premiums so there’s no gap in coverage. If they don’t, the state pursues a case against the business.

If employees find themselves victims of such a scenario, they can check with the insurance department of their own state, which will often work with employees, walking them through their options or, as an alternative, contact the Employee Benefits Security Administration in the US Department of Labor.

This trend should serve as yet another example that–while the health care bill on the table isn’t perfect–employers and employees simply can’t afford to maintain the status quo.