Some big, self-insured companies pay employees with significant health issues to opt out of the company medical plan and get coverage on the insurance exchange market. The companies do this to try d save money. However, the U.S. Department of Labor has recently stated that this practice is illegal.
It is possible for an employee with significant health issues to accrue hundreds of thousands of dollars annually in medical costs. Comparatively, paying for that person’s insurance through the Affordable Care Act’s health insurance exchange program would cost only about $10,000. This is because the cost of coverage through the exchange is set at $10,000 regardless of pre-existing conditions. However, according to the U.S. Department of Labor, when companies push individuals with high healthcare costs onto the exchange, this shifts the high-costs to other insured individuals and the taxpayers. The Department of Labor, backed by the Department of Health and Human Services and the Treasury Department, also state that such shifting violates the Health Insurance Portability and Accountability Act and the Public Health Service Act.
U.S. Department of Labor says these laws restrict employers from paying employees to get outside insurance because this would unlawfully discriminate against employees based on their health status. However, it is unsure what penalties companies will face for paying employees with significant health issues to opt out of the company medical plan.
Other concerns associated with paying high-cost employees to leaving company health programs include increased costs and premiums in the exchange plans and decreased employer-based coverage.
It is unclear how many companies have offered to pay workers with chronic conditions to find coverage somewhere else.
With this in mind, it is important for all employees to know their rights when it comes to healthcare. An employee with a preexisting condition cannot be forced out of his employer’s medical plan.