Healthcare Discrimination: How Legally Savvy are You?
Healthcare discrimination is a major concern for California business owners. Nowadays it seems as if lawsuits are always waiting just around the corner. Do you know how to protect yourself from a healthcare discrimination lawsuit? Recognizing what does and does not constitute healthcare discrimination is crucial to protecting your business.
Can You Spot the Discrimination?
Spotting healthcare discrimination may not be as easy as you think. Read over these scenarios and decided if you think each one illustrates an example of healthcare discrimination.
New Employee Gets Cancer
John, a 40-year-old full-time employee has been with your company for two months when he is diagnosed with cancer. This situation causes several problems for your company. 1) You anticipate a rise in all healthcare premiums due to the mounting healthcare costs that John will incur, 2) you are facing an inevitable decrease in productivity as John feels poorly and often takes time off work for medical care, and 3) you wonder if dropping John to part time status is a good solution because then he would have more time off, be ineligible for the company’s group health plan, and could acquire healthcare through his wife’s employer. Without discussing this with John, you send him a memo stating your intentions to reduce his hours beginning the first of the month. Is this healthcare discrimination?
Filling a Vacant Position
You are interviewing prospects for a vacant administrative assistant position within your company. You have narrowed it down to three candidates, including a woman named Ann who is significantly more qualified than the others. During a reference check with a chatty former employer, you discover that Ann was in a domestic altercation three years, requiring hospitalization. She divorced her husband and spent six months secluded in a battered women’s shelter following the divorce. You learn that her ex-husband is now remarried and no longer has contact with her, but she still requires frequent chiropractic care and daily pain medication as a result of her injuries.
Knowing that Ann’s injuries would be considered pre-existing under your company’s group health plan, thereby raising premiums once the exclusionary period is lifted. Given this new information, you seriously consider hiring one of the lesser-qualified applicants instead of Ann. Is this discrimination?
Sticky Situation
Tom, an employee with your company for 6 years, suffered a broken neck 20 years ago under a different employer. While working for you, Tom was rear ended in a company vehicle at a stoplight. The impact put his head through the back glass of the truck causing him to black out. Once he reached the hospital, the paperwork was not filed as a worker’s comp claim in all the confusion. Later on, your company attorney advises you that you are not responsible for Tom’s injuries because it is a pre-existing injury and the paperwork was never filed.
Tom’s insurance insists the injury is a worker’s comp claim and refuses to pay. Tom cannot afford to pay his portion of the insurance premiums while he is recovering from surgery to repair the re-break in his neck. Knowing this, you do not offer him extended group health insurance under your plan. When Tom reaches the end of his FMLA maximum leave, his position is terminated. You receive papers in the mail informing you of an impending lawsuit against your company. Does Tom have a legitimate case of healthcare discrimination?
Discrimination Conclusions
In John’s case, the drop in hours would not be considered discrimination if John agreed to a reduction based on his health. It also would not be discrimination if he is still under a probationary period with your company if he signed a clause stating that the terms of his employment could be changed or terminated for any reason during that time frame. However, if John was not amenable to a reduction of hours, and no probationary clause was in effect, he could sue you for healthcare discrimination. It is illegal to restrict an employee’s hours simply to disqualify him or her for health insurance.
If Ann pursued a discrimination lawsuit against you, she would have a solid case if she is clearly more qualified than other applicants and she received a second interview, proving your interest in her application. Her lawyer could subpoena testimony from the “helpful reference” you spoke to, proving that you had knowledge of her health problems. It is illegal to base hiring decisions based on the knowledge that her health problems would raise your healthcare premiums.
Tom has a clear-cut case of discrimination based on the fact you did offer to extend his health plan during his unpaid FMLA leave, even though he could not afford the premiums without a job, and you did not offer COBRA coverage upon his termination. While his other legal issues muddy the water, his healthcare discrimination case is crystal clear.