Can my employer cancel my health insurance when I am on LTD?

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Old Dec 27th, 2011, 02:28 PM   #1
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Default Can my employer cancel my health insurance when I am on LTD?

Can my employer cancel my health insurance coverage while I am on LTD? I went on LTD (not workers comp) when I was working for a large bank. Their policy was that I would be considered an "employee on leave" and receive medical insurance benefits until age 65 (I pay part of the premium and the company paid the other part). They sold to another large bank. The new bank is now saying that they will only allow me to participate in the health benefit plan through 2012 and then they will be cancelling me and offered COBRA for a short period of time. They are also terminating my employment status. The new bank's policy on LTD and health insurance was the same as the old bank's. Since the merger, the new bank changed their policy. Is this legal while I was already on LTD? I am in CA.
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Old Dec 27th, 2011, 03:12 PM   #2
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Default Re: Can my employer cancel my health insurance when I am on LTD?

I wish to inform you that your benefits may not be terminated in this regard. As LTD benefits were part of your employment, therefore, terminating health insurance benefits and employment status will amount to breach of contract. You had contributed to health benefit and early termination may amount to breach of contract. You may give a notice to your employer that change in terms of employment and other benefits amount to breach of contract. If the new bank does not resolve the matter, then you may file a lawsuit. The burden of proof will be on you to prove your claims before the court. The court will consider all the facts and decide the matter. Alternatively, you may report the matter to the local office of the Department of Labor nearest to your location.

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Old Apr 13th, 2012, 05:26 PM   #3
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Default Re: Can my employer cancel my health insurance when I am on LTD?

Thank you for your reply. I did contact two places...US Dept of Labor - Wage and Hour Division of the CA Dept of Industrial Relations and Employee Benefit Security Administration. They both indicated that the bank has the authority and right to change their benefit plan at any time as long as they communicate it to the employees and to the people on LTD. It doesn't seem fair. Since these agencies support the bank's position, I don't think getting a lawyer will be of any help. What do you think?
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Old Apr 13th, 2012, 09:54 PM   #4
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Default Re: Can my employer cancel my health insurance when I am on LTD?

I wish to inform you that the "I wish to inform you" guy was wrong. Employers have the right to terminate or change benefits. If an employee finds this unacceptable, they can always resign and find another employer. Frankly, you have no cause of action and an attorney would advise you of the same.
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Old Apr 18th, 2012, 08:26 AM   #5
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Default Re: Can my employer cancel my health insurance when I am on LTD?

It would behoove you to consult with a local attorney knowledgeable in employment law and/or insurance law. Based on your post, you and your employer apparently purchased long term disability insurance. Normally, neither the employer nor the insurance company can unilaterally alter the terms of the policy following its issuance.

Considering what is at stake for you, you definitely want to confer with counsel who can meet with you face to face, review the documentation, and research the law. You may have contract law and/or insurance law related claims. Local counsel can provide you with needed, more definitive answers.
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Old May 1st, 2012, 10:23 AM   #6
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Default Re: Can my employer cancel my health insurance when I am on LTD?

Thank you StorageGuy for your response. Unfortunately, I believe that you are correct in that "employers have the right to terminate or change benefits"...with "benefits" referring to the enrollment in company sponsored Health Plans (Medical, Dental, Vision). I think that they way they did this was not fair to me...running with the understanding that this benefit would be available to me until age 65 while on disability, then they say it won't and it will be terminiated at the end of the year.

Also, thank you ESteele for your response. You are correct in that "neither the employer nor insurance company can unilaterally alter the terms of the policy following its issuance"...with "policy" referring to Long Term Disability Insurance. I am still and will remain on LTD until age 65. They are not cancelling the disability insurance. They are cancelling my participation in the company's health care insurance.

I was hoping that I could find someone that found a legal standing that would support my continuance in the company's health care program that includes medical, dental, and vision.

Thank you all for your input and support and if anyone else has any experience with this that had a different result, I would greatly appreciate it.
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Old May 1st, 2012, 11:18 AM   #7
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Default Re: Can my employer cancel my health insurance when I am on LTD?

Laurie, I was suggesting that if your employer informed you in writing that you would be maintained on its health insurance plan for as long as you received long term disability insurance benefits, then you may have a basis for challenging its decision to renege on this agreement.

As mentioned above, you probably want to consult with local counsel who will have the benefit of reviewing the relevant documents in light of the applicable statutes and court decisions.
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Old May 7th, 2012, 12:12 PM   #8
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Default Re: Can my employer cancel my health insurance when I am on LTD?

ESteele, thank you for your post!

So I think I see were you are defining the legal position that I can stand on. Since I have a document in writing that states that I will receive medical, dental and vision insurance as long as I am on LTD and this document was still current and active at the time I went on LTD, you're saying that this document or policy can not be changed after I went on LTD. After going on LTD, I do not have the abililty to seek employment with another employer that can offer this coverage. Is this a disability discrimination right of protection type of legal position?

So, since this is a contract and if the company wants to change it, they can only change the policy "going forward" for employees that have not yet gone on LTD. Am I understanding you correctly?

I appreciate your guidance!
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Old May 8th, 2012, 09:35 AM   #9
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Default Re: Can my employer cancel my health insurance when I am on LTD?

You encapsulated how I see it well. I would strongly urge you to consult with a local employment law attorney to confirm efficacy of this approach and to consider taking appropriate legal action.
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Old May 10th, 2012, 12:10 PM   #10
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Default Re: Can my employer cancel my health insurance when I am on LTD?

ESteele...thank you again for your post. I appreciate all your knowledge and direction. I will move forward to contacting an employment law attorney. Thank you again!
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