Can an employer drop insurance without notice and offering a COBRA plan?
Question Details: Apparently, my wife's employer who was paying for our health insurance stopped making payments for the August premium. Nothing was said to us by either the employer or the insurance company. Many authorizations were approved and took place in the time following the non-payment leaving us with huge medical bills we are unable to pay. Why didn't the insurance company say something to us and or why didn't her employer? Also, why would they approve procedures they knew they were not going to pay. The odd thing is they kept paying for prescriptions right up to October 1st, I believe. Is this even legal? Do we have any recourse to obtain payment for what they approved or would we have to go after her old boss?
You can sue your employer for any costs (e.g. medical bills) you incurred. You were working pursuant to an agreement (even if only an oral or unwritten one) that in exchange for working, you'd receive certain pay and certain benefits, including health insurance. While an employer may drop the insurance going forward unless there is a written contract guarantying you for a fixed term (like they can chance or reduce your pay, your vacation days you accrue, etc. going forward on notice), the key is, they can only do that after notice of the chance. Until notice is provided, you are working according to the then-in-effect agreement, which means you were working in exchange for, among other things, your health insurance. If you did your part (e.g. your wife worked), the employer was then contractually obligated to do its part (provide the agreed upon pay and benefits, including insurance). Failing to provide insurance when you were in good faith, without knowledge of a chance, working for it is "breach of contract." So you can sue the employer--which is the one which breached the agreement with your wife--the costs, etc. you incurred. (The insurer did not breach, since their obligation was only to provide coverage so long as premiums were paid; once premiums were not paid, they did not need to provide coverage.)