When employees are going through health challenges, the hope is that they are fortunate enough to have access to effective insurance. But what if their employer has a financial incentive to limit employees' costs against the health plan? Under some types of health plans (particularly "self-insured" or partially self-insured), there are regular, written reports sent between the insurance company, the broker, and the employer about the health conditions and costs of employees – and perhaps how much those costs are affecting the employer itself.
This creates an awkward situation for employees with health conditions. One potential (but terrible) fix to this problem might be inventing and reporting fake employee health conditions to disrupt an employer's evaluation. When they did that here, it just created more problems:
As you can likely guess, just inventing fake conditions won't address the issue. While health data exchanged between employer and insurer is often "anonymized" (the employee's name is not explicitly linked to the condition), most workplaces are small enough that management is able to tell which employees are linked to which real conditions. Thus, if your employer has a self-insured or partially self-insured plan, it likely knows your medical conditions – and how much they cost.
Fortunately, the law provides protection for employees so that they don't have to resort to making up fake conditions like "government-created killer nano-robot infection" or "Count Choculitis." The Employee Retirement Income Security Act ("ERISA") forbids employers from interfering with an employee's access to a health plan – including "interference" by terminating the person's employment. Importantly, an employer can be sued under ERISA if an employee's health costs were merely a "motivating factor" in the decision to terminate employment. This means an employer can have multiple reasons for firing an employee, but if the employee's health costs are but one reason, then the termination is illegal. As a result, employees should be wary of an employer expressing concerns about rising health costs, or of the loss of a job close in time to an event that could lead to increased costs to the health plan.
ERISA also forbids an employer from retaliating against an employee for insisting on remaining on a health plan. So, if an employee enrolls in coverage, becomes ill, then refuses an employer's request to locate alternate coverage, the employer cannot fire the employee to either limit its costs or send a signal to other employees (at least not without violating ERISA!).
While more specific than ERISA, it also bears mentioning that Medicare laws have specific provisions that limit employers in trying to "force" their Medicare-eligible employees off a private health plan.
Lastly, whenever an employment situation is complicated by health, remember there are other laws that likely apply – namely the Americans with Disabilities Act and Family and Medical Leave Act. So, even if a disabled employee's health costs are not relevant, employers should be sure of compliance with the ADA and FMLA (as well as counterpart state laws) to avoid mismanaging tricky, health-related workplace concerns.
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.