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Cancelling group coverage without notice.

Houston, TX |

I'm in Houston, Tx. My wife and I were 2 of 3 participants in group coverage that expired on 12/31/12. We were told coverage was renewed for my wife and I for Jan. and first week deduction from payroll was taken on Jan. 3rd check.
We both resigned on 01/09/13 and we thought coverage was good for Jan.
My wife followed through with appointment she had made for routine mammogram on 01/14/13 but recently found out claim was denied because premium was not paid.
Issue#1 Does employer have obligation to present written notice plan was ending even though COBRA was not an option?
Issue#2 Does employer have liability because of first week in Jan. payroll deduction was taken?
Additional comments:
1. I was involved in renewal negotiations as late as Jan.3rd, 2013
2. I signed & mailed Jan premium chec

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Attorney answers 3


If January premiums were collected, but were not paid to the insurer, you are entitled to recover the premiums paid. You may also have a claim for fraud and misrepresentation. However, your health plan may have been established and maintained under the Employee Retirement Income Security Act (“ERISA”). ERISA is a Federal law which generally preempts state causes of action (like fraud and misrepresentation). Litigation of claims relating to and arising out of ERISA health benefit plans is extremely complex. It is impossible to adequately explain how this sort of litigation works in an online forum like this. I strongly urge you to consult an experienced ERISA attorney to discuss your situation. You can also contact the Employee Benefits Security Administration (“EBSA”). The EBSA may be able to assist you in evaluating your potential claims. I have provided a link to the EBSA’s website below.
Further, if the health plan was properly terminated, there are no COBRA benefit rights. If the plan continued, but your participation was cancelled, then you may be entitled to COBRA notice and coverage.
Good luck.

Your question has been answered as a courtesy. This is not paid legal advice. Nothing in this communication is intended to create an attorney-client relationship. Unless expressly stated otherwise, nothing contained in this message should be construed as a digital or electronic signature, nor is it intended to reflect an intention to make an agreement by electronic means.



Thank you for the advice


William laid it out well


I agree with William but would add that your employer breached a fiduciary duty by withholding premiums and not remitting them for coverage. This was a repesentation of sorts that coverage was ongoing. The problem however is whether the cost of the treatment not covered as well as the deducted premiums are significant enough to involve an attorney. Therefore I agree with William that you should report this to EBSA and see what it will do. You may also have the option of filing suit in a small claims court to obtain your money back on your own.

More facts need to be known so do not rely on comments here until consuting with an attorney that practices regularly in this area of law.

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