Know Your Health Insurance
Published 16th March 2009, 5:30pm
In tough economic times, when many fear losing their jobs, it is vitally important to know your health insurance rights, said Director of Health Regulatory Services and Superintendent of Health Insurance Mervyn Connolly.
"The Health Insurance Commission has been receiving increasing numbers of enquiries regarding what happens to your health insurance coverage if you lose or change your job.
"As such, we are reminding employers that their health insurance obligations don't end when they decide to terminate an employee's contract. Equally, employees should not assume that continued coverage is automatic, and they should know their rights under the law," Mr Connolly explained.
According to the Health Insurance Law (2005 Revision) employees' health insurance ends on the first day of the month following departure from a job. However, if employees lose their jobs and are not immediately employed elsewhere, they can keep existing health insurance for up to three months from the date of termination of work or until they gain new employment, whichever occurs earlier.
An employer cannot refuse to extend the cover of a terminated employee. Doing so can lead to a fine of up to $5,000. However, following termination, it becomes the employee's responsibility to pay the entire premium, unless the employer has agreed to pay it as part of a severance agreement.
Mr Connolly noted that it is imperative that employers proactively engage their staff on the issue of health insurance: "As soon as you know that you have to let someone go, sit down and discuss the matter immediately," he said.
In that regard, the Health Insurance Commission has issued guidelines to employers for dealing with such situations:
- Offer to keep the employee (and dependents-children and/or an unemployed spouse) on the group policy;
- Make arrangements regarding how the premiums will be made;
- Remind the employee that he/she will be responsible for 100% of the premiums. However the employer can offer to pay them;
- Honour employee requests to continue coverage for themselves and dependents.
Sidebar: Health Insurance Law - Termination of Contract
Section 15 (2) (3) & (4) of the Health Insurance Law (2005 Revision) entitled Termination of Contract states:
- A standard health insurance contract terminates on the first day of the month next following the date of termination of employment of an employee; but if that employee does not become compulsorily insured with any other employer, cover under the contract shall continue for a period of three months from the date of termination of employment or until he becomes employed, whichever is earlier.
- An employee shall be liable to pay the total cost of the premiums payable under a contract of health insurance which has been continued pursuant to subsection (2).
- An employer who, having been notified by his former employee that he is not employed and that he is not compulsorily insured, fails or refuses to extend the cover under the contract as provided in subsection (2) is guilty of an offence and liable on summary conviction to a fine of five thousand dollars.
Source: Health Insurance Law (2005) Revision.