My Employer Failed to Pay the Insurance Premium & Never Told the Employees: Do I Have a Legal Case?

One of the main reasons that many people maintain full-time jobs is to receive health insurance provided through their employer at a reasonable cost. Health insurance provided through a job is generally much cheaper than coverage purchased as an individual, partly because the employer will usually pay part of the premium. If an employer arranges with an employee to pay premiums but doesn't purchase that coverage, this is against the law.

Employee Benefits

• Employers will offer benefits as part of a compensation package. In nearly all cases, the provision of these benefits is secured in a contract that the employer and the employee both agree to. If the employer agrees to provide health insurance in return for the employee paying part of a premium, then he is legally obligated to purchase that coverage. The employer will be in breach of contract is he does not.

Civil Case

• An employee who finds out that his employer failed to provide him with health insurance after the employee paid his portion of premiums will certainly have a case against his employer. The employer not only broke the contract, but he lied to the employee about the coverage he was promising. The employee can sue for damages at least in the amount of the premiums, though he could probably sue for more than that.

Damages

• An employee will also be entitled to additional damages if he attempted to file a claim with his insurance company while he believed he was receiving coverage and was denied. The employer will likely not only have to pay the cost of the procedures but, if the employee was denied the care he needed, additional damages for pain and other losses, as well as potentially punitive penalties.

Criminal Penalties

• An employer who falsely tells her employees she is providing coverage in exchange for the payment of premiums is not just breaking her contract with the employees; she is committing financial fraud. This is because the employer is taking money from people for the provision of a good -- health care coverage -- that she is not providing. She could face a fine or jail time if found guilty of this offense.