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Is it legal to deduct medical insurance premiums from Severance pay?

Jersey City, NJ |

My ex-employer offered severance pay (1 lump sum paid out in 2 installments) and to cover medical insurance 1.5 months after my layoff but they deducted the premium from the pay. Is this legal? The agreement stated the company would cover medical in addition to the severance pay.

Attorney Answers 1


You need to consult with an experienced employment lawyer to review the settlement agreement. It may just require the company to pay its part of the premium and leave you responsible for your part, assuming that you contributed something to the premium while employed.

A response to a question posted on Avvo is not intended to create an attorney-client relationship. It is informational only. Allan E. Richardson, Esq. Richardson, Galella & Austermuhl 142 Emerson ST., Woodbury, NJ 08096 856-579-7045.

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Thank you, Allan. The agreement doesn't reference the medical again anywhere in the contract. Severance was to be paid out "less applicable statutory deductions and withholdings" and does not define them, but I would think it would have also stated, "less medical" or something to that effect if that was their intention. Can I argue this?

Allan E Richardson

Allan E Richardson


You can argue anything. Persuading is another matter. Nothing beats an attorney review of the entire document.



Got it. Thanks, again!

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