Navigating Health Care Costs: What Employers Need to Know

Dealing with escalating healthcare costs is a significant concern for employers, especially when an employee experiences a serious health condition. However, it's crucial to understand the legal boundaries regarding how to handle such situations.

Legal Protections for Employees

When an employee is diagnosed with a serious and costly health condition, employers might worry about the potential increase in healthcare premiums. Despite these financial concerns, employers are legally prohibited from taking adverse employment actions based on an employee’s health condition. This means:

• Termination: Employers cannot terminate an employee solely because they have been diagnosed with a costly medical condition.
• Benefit Plan Removal: Removing an employee from the company’s health benefit plan due to their health status is not allowed.
• Access Limitation: Any steps to limit an employee's access to the group health plan are prohibited.

Case in Point: EEOC vs. Texas Auto Dealer

A recent case involving a Texas-based auto dealer highlights the consequences of not adhering to these protections. The dealership terminated a 65-year-old employee following a cancer diagnosis, concerned about the potential rise in health plan costs. This action was deemed a violation of both age and disability discrimination laws. The result? The dealership was ordered to pay $325,000 in damages.

This case serves as a stark reminder that while managing healthcare costs is challenging, taking illegal actions against employees with serious health conditions is not the answer. Employers must navigate these situations with an understanding of the legal protections in place, ensuring fair and lawful treatment of all employees.

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