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Questions regarding termination of employment while on LOA/LTD Texas

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  • Questions regarding termination of employment while on LOA/LTD Texas

    I am sorry that is going to be long but there are so many details so please bear with me....

    My husband works/worked for "X Company" for 3 years. He went out on FMLA/short term disability for a month in May 2006 due to complications with Multiple Sclerosis. His condition progressively worsened and he was unable to perform his job to his supervisor’s expectations. It was known that "X Company" was selling to "Y Company" in the near future and he was advised by the HR Manager that it would be in his best interest to go out on disability before the new company took over so that he would remain an "X Company" employee. She stated that "X Company's" LOA policy was for 28 months and when that time was up he would be offered health coverage at employee cost until the age of 62. Much better than what he would get if he waited for "Y Company" to take over. So, in October 2006 he was out again under short term disability. On January 1, 2007 "X Company" was sold to "Y Company". He remained on STD and in April 2007 he was place on LTD. On December 22, 2007 we received a letter from "Y Company" stating that his employee would be terminated effective 12/31/07. We called and left several messages and continued to call them before we finally got to speak to someone it was 1/9/08. At that time we spoke to the same HR manager that gave him his information and she stated that it was a mistake and his employment should have never been terminated due to the fact that he was an "X Company" employee. She said that she was reinstating his employment and benefits. I requested a letter stating that his employment had been reinstated and she said that she would send it. She also said that she would check into what company he actually belongs to but regardless of that he should have not been terminated as "Y Company's" policy is 12 months from the LTD date (April 2007) and it hasn't been that yet and "X Company's" was even longer (24 months). I spoke to her a couple of days later and she said that his health insurance was reactivated. On Tuesday my husband had 2 doctors’ appointments and we dropped of some prescriptions to be filled. Yesterday we received a call from the doctor's office that his health insurance is no longer valid. I called the insurance company and they said it was terminated 12/31/07. So obviously it was never reinstated. I called the HR department today and the lady we have been talking to is now saying that he was considered a "Y Company" employee and the letter of termination stands. Can they do this? He never "worked for "Y Company", he was never issued a badge, signed their policies, nothing. We were told that he would remain an "X Company" employee. His LTD insurance checks come from "X Company". Now my husband and our 2 small children have no health insurance. His doctors are going to bill us for those appointments he went to earlier this week which I am sure will be atleast $2,000. He has to take daily injections so that his MS doesn't get worse and we can not get those now since he doesn't have insurance (they are $3,000 per month). He was supposed to start therapy next month and can't now. We were never even offered COBRA. Can they do this?

  • #2
    Does Company X even still exist? They do have 44 days from the date of lost coverage to offer COBRA so you may need to sit tight a bit longer.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.


    • #3
      Originally posted by ElleMD View Post
      Does Company X even still exist? They do have 44 days from the date of lost coverage to offer COBRA so you may need to sit tight a bit longer.
      Yes, it does still exist and is one of America's largest companies.


      • #4
        In cases of a corporate sale, eventually the employees of the acquired company always ultimately become employees of the acquiring company. The length of time it will take for this to happen is variable depending on the size of the companies, the various payroll/benefits systems, and a number of other factors. It can be a month or two years. But eventually it will happen. It is also not uncommon for the time at which it happens to be slowed down, or speeded up. The same is true in cases of a merger. I recently spent a year as a contract employee of a law firm while it was in the process of merging with another law firm. For a while each firm kept its own policies, procedures, payroll practices etc. But it is neither fair nor reasonable for this to continue indefinitely, and shortly after I left the two merged all their policies, practices and systems into a single one. Because it was a merger and not a sale, neither side kept all their policies; each firm kept some and lost others. But things run much smoother for everyone now that they are all on the same systems.

        It seems to me, from reading your post, that what has happened is that the time frame for merging the two company's systems, policies, etc. has been speeded up. This is legal. What I can't tell you is whether or not, under the circumstances, they are bound to continue X's policies for your husband. Under the law, he has already received more than they are required to provide. Whether or not he is entitled by contract to remain "grandfathered" on the original policies is not something that we can determine on a message board. That is something that will be determined by many, many variable factors including the terms of the sale.

        The company is still well within the legal limit for providing COBRA information. They have up to 44 days from the end of his coverage for that. Your husband then has 60 days to opt to elect COBRA, and 45 days from the day he makes the election to submit his first payment. The company is legally entitled to cancel his coverage until such time as they have received his first payment; however, coverage will be retroactive till, in this case, January 1 at that time.

        If he wants to pursue the legality of the termination he will have to discuss it with a local attorney. It is far too complex a situation to be determined on a message board.

        I hope he's doing all right.
        The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


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