ERISA Section 510 Protects Workers on Company Group Health Insurance

Many employees depend on their employer for health insurance. For those employees, losing a job during a time of illness can be a double-blow: not only is a source of income gone, but the health insurance is too. But what if the reason the employee gets fired is because their employer does not want them on the company health insurance? Does the employee have any protection? Thankfully, yes.

Section 510 of the Employee Retirement Income Security Act, or “ERISA,” forbids employers from firing employees in order to keep them from obtaining employee benefits. 29 U.S.C. § 1140. While it was intended primarily at stopping unscrupulous employers from firing employees to keep them from vesting in pensions, it also applies to non-vested benefits, such as employer-provided health insurance. So employees who are fired to keep them from getting the benefit of their employer’s health insurance plan have a claim under ERISA section 510.

These ERISA claims arise under a number of common fact patterns. For instance:

• When an employee who is on the employer’s health plan gets fired shortly after she (or a family member) gets sick.
• When an employee is fired after she (or a family member) gets sick and tries to join the employer’s health plan.
• When an employee who has incurred, or is about to incur, significant medical bills is fired shortly before or after the employer’s healthcare premiums come up for annual renewal.

Any of these scenarios might suggest a potential ERISA section 510 claim. They also might implicate a disability discrimination or Family and Medical Leave Act claim. Regardless of whether those other laws apply, employees in these situations should consider whether the company’s motivation might have been to keep them off the group health plan.

Section 510 claims are important because they can provide wrongfully fired employees a meaningful recovery at a time of tremendous vulnerability. Compounded with the loss of employment, the costs of medical bills can be devastating for employees and their families. ERISA section 510 allows a successful plaintiff to recover the cost of the lost benefits otherwise owed to them, i.e. the medical bills. It also permits recovery of back pay, front pay, reinstatement, and attorneys’ fees.

Getting fired because you get sick is difficult enough. Losing your health insurance to boot might be too much to bear. Luckily, ERISA section 510 can get employees and their families back on the road to financial security.