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Keep health costs out of the equation when considering hiring and firing

by on
in Employee Benefits Program,Firing,Hiring,Human Resources

It’s frustrating! Every year, employers face yet another jump in their health insurance premiums. And if your payroll has more older or sick employees, those costs rise even faster. Even adding one sick child to the list can spike your costs.

Before you even consider firing (or refusing to hire) someone because they might jack up insurance costs, count your dollars, not your pennies. You may be staring down a lawsuit that could dwarf whatever premium costs you hoped to avoid.

Recent case: After being fired, Jay Dybdahl sued his former employer. He claimed the real reason was that his son was seriously ill and, therefore, a drain on the company’s health plan.

The court sent the case to a jury trial. Dybdahl can argue that coincidental timing cast doubt on the company’s claim it had good reasons to terminate him. (Dybdahl v. Midwave, No. 09-331, DC MN, 2010)

Final notes: Simply put, it’s illegal under the ADA to terminate someone because of his or her association with a disabled person. Plus, the federal law governing health plans—the Employee Retirement Income Security Act (ERISA)—makes it illegal to fire someone in order to deny a benefit he or she would otherwise receive.

Imagine how a case like this would play in front of a jury. The sky’s the limit on damages.

Advice: In a situation like this, just bite the bullet. Either you or your employees will pay higher premiums.

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