Health Insurance Benefits: Guide to Legal Protections

Health insurance is one of the most important benefits of working besides base pay. Health care can be expensive, and basic doctor bills can eat up a working family's paycheck. Consequently, the federal government and many states have enacted protections for employees' health insurance. Read on to learn more about the legal protections safeguarding your health insurance coverage.

ERISA and Health Care Plan Enforcement

The Employee Retirement Income Security Act (ERISA) governs employees' health insurance plans. The act covers retirement benefits, like pensions and health insurance benefits. The health insurance coverage part of ERISA has been amended several times. Two amendments are particularly important for workers:

• Consolidated Omnibus Budget Reconciliation Act (COBRA)
• Health Insurance Portability and Accountability Act, or HIPAA

COBRA

COBRA is a federal insurance coverage program requiring employers to continue group health coverage temporarily. It applies to full- and part-time employees who resign or are terminated for any reason other than "gross misconduct."

COBRA applies to employers with 20 or more employees within their group health insurance plans on more than 50% of the business days of the previous calendar year. The employee at issue must be a "qualifying beneficiary." This means they were covered by a group health plan before the termination of employment as an employee, an employee's spouse, or an employee's dependent child.

HIPAA

HIPAA allows insurance companies to transfer a patient's medical records to a different doctor or insurance company without impinging on the patient's privacy. The Affordable Care Act (ACA) is not an amendment to ERISA. But, it greatly impacts how health insurance works and what health care providers should charge for routine and preventative care.

ERISA and its amendments do not cover every single health plan. They only cover those that are purchased through an employer or a group for the benefit of the employees or members. Furthermore, ERISA does not require employers to provide health insurance. It only requires that any health plan provided complies with ERISA's requirements.

How ERISA Protects an Employee's Health Benefits

ERISA is a large and complicated statute. It has many different protections for health plan participants. Patients and employees generally do not have to worry about ERISA compliance. The burden falls on the employer or the plan administrator. They are responsible for keeping an employee benefit plan in compliance and managing the plan for the benefit of the members. Here are the basic ERISA requirements that health benefit plans must meet:

• All beneficiaries must be informed in writing about the plan's benefits. The Affordable Care Act further provides that the information must be in an easy-to-understand summary of benefits. There must also be a web address where the information can be found online.
• Employers have a fiduciary responsibility to the plan beneficiaries. This means that when negotiating plan benefits, employers must always act in the best interests of their employees.
• Claims for benefits must be decided in a timely fashion. If the claim is denied, there must be a process for review. This provision is especially important to employees who have Health Maintenance Organizations (HMOs).
• If an employee's benefits are terminated, it must be for a bona fide reason. For example, an employer cannot terminate an older worker's benefits because their health care needs are more expensive.

If you think your employer or health plan violates ERISA, you can file a complaint with the Employee Benefits Security Administration. In addition, contacting a local employee rights or ERISA lawyer for legal advice may be in your best interests.

See FindLaw's Employment Law and Health Care Law sections for more information.

When an Employer Is Required To Provide Health Care Coverage

Under federal law, the requirement for employers to provide health care coverage varies based on factors. These factors include the size of the business and the status of employees. Large employers, typically those with 50 or more full-time employees, must offer health care benefits to eligible employees.

In contrast, small-business owners with fewer than 50 full-time employees may not be subject to the same mandate. However, small employers can choose to provide health care coverage voluntarily. Employers and employees need to be aware of these distinctions. Compliance with federal regulations ensures eligible employees can access necessary health insurance policies, contributing to workforce well-being.

You Don't Have To Solve This on Your Own – Get a Lawyer's Help

Meeting with a lawyer can help you understand your options and how to protect your rights. Visit our attorney directory to find a lawyer near you who can help.