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I had disabilty coverage through my employer’s group health plan. I was dropped. Is that legal?

UPDATED: February 20, 2013

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Your employer is not required by law to provide you with insurance, so if your disability coverage is dropped from your group health plan, nothing illegal has happened in most cases. 

What are the rules for group health plan insurance provided by an employer?

While it is usually legal for your employer to drop your insurance, there are a few caveats to this, and it's important to ensure that you check into the following points if you're concerned about what has occurred.

First, the rules of contract insurance must be followed. Read your insurance paperwork carefully, because there are certain rules that your employer and insurer must follow in order to drop coverage. Make sure that they have done so.

Second, there must be a legitimate reason behind the change. If you're being dropped because you suddenly need the insurance, your employer may be acting in bad faith, and may not have a legal reason for dropping you. Make sure to obtain a complete explanation in writing detailing what has changed, and check to make sure it meets the requirements of the insurance contract. If you need help deciphering the facts, contact a lawyer.

Third, you should have been given notice. The time frame required may differ, but generally every insurance company is required to give you a certain amount of notice before changing your insurance coverage. Typically, this is 30 days. If the proper notice was not given the action taken may have been illegal.

If these conditions apply, what are my options?

If the conditions above apply, then it’s likely that nothing illegal has happened; you've just been put into an unfortunate situation. Your employer may provide you with information about other options to explore, including COBRA.

You may be also able to open your own private policy with the insurance company, which your employer may then reimburse. Ask questions and make sure to clarify anything you do not understand in order to ensure your rights have been protected.

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