Matters in Healthcare: What can I do if my job fails to pay my insurance?

FRIDAY, JULY 27:

What are employers’ legal obligations regarding health insurance?

All employers must buy the mandated minimum health insurance package for employees and their employees’ non-working spouses. Self-employed persons must also have the minimum health insurance. Failure to provide health insurance can result in a $500 fine.

Employers must pay the full premium but may deduct half the cost of the minimum health insurance package from an employee’s salary. Making deductions greater than allowed can result in a fine of $1,000.

After an employee is hired, the employer must give the employee a written statement with the name of their health insurer, the date it came into effect and the policy number. Failure to provide a written statement can result in a fine between $500-$1,000 or imprisonment for six months.

What is the mandated minimum health insurance package?

The mandated package is the Standard Hospital Benefit. It covers hospital costs locally and overseas. The Standard Hospital Benefit is NOT the same as HIP. “HIP” is the Government’s Health Insurance Plan. It is a low-cost package that includes Standard Hospital Benefit plus some supplemental benefits. HIP is less than what we call “major medical”, the most common type of health coverage provided by private and Government insurers.

Do most employers do what the law says?

Most employers in Bermuda provide more than the legal requirement. Generally employers provide supplemental benefits beyond the mandated minimum and pay for half the cost. Most employers provide “major medical” and a minority provide HIP or HIP-equivalents sold by private insurers.

In the current economic climate a small, but growing number of employers have been reported to be falling behind with health insurance premiums.

What happens if an employer doesn’t pay the premium?

If an employer stops paying premiums to the health insurer, their policy is put “on hold”; this means the insurer stops paying claims because premium is owed and a repayment plan is not in place. Insurers vary in their time allowance for this, but each employer is aware of it. Insurers liaise with employers who fall in arrears. If premium is not paid beyond the allowable period, the policy is terminated and the employer is informed.

Health insurers report to the Bermuda Health Council when policies are terminated or put on hold. The Health Council follows-up with employers whose policies were terminated, to verify if a new policy is in place. If a new policy cannot be confirmed, they are referred to the Department of Social Insurance (DOSI) who inspects employers’ records directly. Where a breach in the law is found, employers can be fined and/or imprisoned for six months.

What should employees do?

When you start a job make sure your employer gives you information about your health insurer and your policy number.

If you have a non-working spouse or other dependents on your policy, make sure you keep your employer up-to-date if their particulars change (e.g. if your spouse starts working).

If you are concerned about your coverage, approach your employer or insurer directly to verify whether your policy is active. Because the health insurance contract is between the employer and insurer, employees may not be aware if the policy is on hold or terminated. Always check back with the employer to confirm information and avoid raising alarm due to administrative errors.

What do I do if I find that my employer has made deductions but I have no insurance?

If you confirm that you have no health insurance coverage, but deductions have been made you should liaise with your employer to seek a resolution. If you are not able to resolve the matter, you may contact the Bermuda Health Council to advise us.

Section 25 of the Health Insurance Act 1970 entitles individuals to recover the benefits lost from your employer as a civil debt before a court.

To do so, we would first need to verify through inspection of records the amount owed.

Where can I find out more information?

The Health Insurance Act 1970 can be found at www.bermudalaws.bm; see Sections 19 – 26 of the Act for employers’ obligations. In addition, BHeC has a pamphlet called “Why Health Insurance” which summarizes the basics; it can be found on www.bhec.bm, under “Resources / Pamphlets”.

Jennifer Attride-Stirling is the CEO of the Bermuda Health Council.