Terminating Coverage
Q. An employee has been permanently disabled since 2012 and has been allowed by union contract to remain on the group insurance, provided the employee pays his or her share of the premium. The employee has become delinquent and has stated they don't have the money to pay the amount due. Are we allowed to terminate the coverage?
A. Yes, you can, assuming the union contract does not state otherwise. If the contract does not state otherwise, you are not bound by Idaho or federal law to maintain employee coverage under these circumstances. Specifically, the Americans with Disabilities Act (ADA) and the Family and Medical Leave Act (FMLA) do not require continued coverage in your situation. Employee coverage under the ADA is required only if continued coverage is provided for other employees on similar leave. Terminating coverage for this employee for failure to pay the premium is not an ADA violation if all similarly-situated employees are held to the same standard.
While the FMLA has no bearing under these circumstances, it would require continued coverage during a qualified employee's 12-week protected leave. Once the 12 weeks conclude, the employer is not obligated to maintain the coverage.
As stated above, although no laws require you to maintain this employee's coverage, you are required to follow the terms of the union contract. So, unless the union contract terms state differently, you can terminate the coverage. Do note that, if the union contract includes a provision detailing how to handle such termination, you should follow that provision. However, if the contract is silent as to termination, a best practice may be to adopt the FMLA's termination procedures, providing written notice to the employee that the employee's premium payment has not been received at least 15 days before coverage is set to terminate.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
