Legal Question in Employment Law in Pennsylvania

Can an employer legally keep funds that were deducted from employees pay for health insurance, even though the insurance was cancelled? During July, August and Sept. 2010, our company deducted funds from our payroll and our insurance company notified us in Sept. that our health insurance was cancelled recently due to non-payment by our company. The money deducted from us is in the company's bank account and has not been returned to the employees. The payroll company was not informed to quit taking payments out until October. The health insurance was only covered until June 2010. The health insurance covered employees through Sept, but after non-payment they said we are only covered until June 30, 2010 and they will request the money back from doctors, hospitals, etc. that they paid. My boss said they are not required to pay us back? Wouldn't that be illegal for the company to keep funds that were specifically meant as partial payment for our health insurance when they didn't even pay it?


Asked on 10/25/10, 6:18 pm

1 Answer from Attorneys
Roger Traversa Arjont Group (Law Office of Roger Traversa)

This is a very complicated answer that I will make into a short general explanation. You should consult counsel if you would be affected by this problem in any manner.

Generally, the employer became responsible for the health insurer's portion of the health care costs when it accepted the payments and allowed the policy to lapse. The employer can be held to task for any payments that the health insurer reneges on or which should have been paid by the health insurer during the period that the employer was accepting the payments.

Again, this is very general information and you should consult counsel in your specific situation.

Regards,

Roger

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Answered on 11/02/10, 12:34 pm


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