No Legal Right to Coverage | Health Insurance

While many workers feel insurance coverage is an entitlement, in reality, offering health insurance to employees is purely voluntary—a matter of tradition, not law. This truth flies in the face of many firmly held beliefs about workplace benefits. But, in fact, there is no federal law that requires employers to provide or pay for health insurance coverage for all current employees, or even full-time employees. In 2004, only 61% of all working employers received health insurance coverage from their employers.

No federal legal scheme requires every employer to offer insurance coverage. However, an employer who promises to provide health insurance—in an employee manual, for example—must follow through on the promise. And benefits must be provided without discriminating against any employee or group of employees. That includes employees who are statistically more likely to incur high medical costs. For example, federal laws specifically provide that women workers and older workers must be provided with the same coverage as other workers. (See Chapter 7, Sections C and E.) One grand exception to this general rule is that many state laws now allow employers to offer health plans that offer higher premiums to smokers. (See Chapter 6, Section E.)

In recent years, some companies have discontinued or cut back on insurance coverage they offer employees, simply because of the expense. The legal rule emerging is that of evenhandedness: Employers cannot offer insurance coverage to some employees and deny it to others.

But because health insurance is a job benefit that is not regulated by law, employers are otherwise free to fashion a plan of any stripe. They may:

require employees to contribute to the cost of premiums

offer reduced reimbursement or pro rata coverage to part-time employees

limit options to one insurance plan or offer a variety of choices, or

give employees a sum of money earmarked for insurance coverage that may be applied to any chosen plan.

As anyone who has read the fine print on a health insurance policy can attest, insurers, too, place conditions on the coverage they provide. The most nettling of these limitations is on preexisting conditions. Under these provisions, if you have had a recent illness or have a chronic medical condition, you may be denied coverage, be made to wait a specific time period until your condition will be covered, or be forced to pay high premiums for specialized coverage. The greatest headway on doing away with the preexisting condition denial of coverage has been made in the federal law requiring continuing coverage for former employees. (See Section C3, below.)

Traditionally, employers that have provided health care coverage have done so through an indemnity or reimbursement plan which pays the doctor or hospital directly or reimburses the employee for medical expenses he or she has already paid.

While traditional coverage allowing employees to seek out their preferred medical provider is still widely used, a growing number of employers today provide coverage through the alternatives of a health maintenance organization (HMO) or a preferred provider organization (PPO).

An HMO is made up of hospitals and doctors who provide specified medical services to employees for a fixed monthly fee. Within the HMO service area, covered employees must use the HMO hospitals and doctors unless it’s an emergency or they receive permission to go elsewhere.

A PPO is a network of hospitals and doctors who agree to provide medical care for specified fees. Often the network is put together by an insurance company that also administers it. Employees usually can choose between using the network’s hospitals and doctors or going elsewhere.

There are two main categories of employee health insurance: coverage for current employees and coverage for former employees.

Rights Under the FLSA : Restrictions on Child Labor

Minors under 18 years old may not work in any jobs that are considered to be hazardous—including those involving mining, wrecking and demolition, logging, and roofing. The Secretary of Labor defines what jobs are deemed hazardous and so out-of-bounds for young workers. To find out which jobs are currently considered hazardous for the purposes of the FLSA, call the local office of the U.S. Labor Department’s Wage and Hour Division, located in the government section of your telephone book The Department of Labor’s website, at www.dol.gov, has a listing of local offices—and also has information about child labor restrictions.

To encourage youngsters to stay in school rather than becoming beholden to the dollar too soon, there are additional restrictions on when and how long workers between ages 14 and 16 may be employed in nonhazardous jobs:

They may work no more than three hours on a school day and no more than 18 hours in a school week.

They may work no more than eight hours on a nonschool day and no more than 40 hours in a nonschool week.

During the period that starts with the day after Labor Day and ends at midnight May 31, their workday may not begin earlier than 7 a.m. or end later than 7 p.m.

From June 1 through Labor Day, their workday may not begin earlier than 7 a.m., but it can end as late as 9 p.m.

Some industries have obtained special exemptions from the legal restrictions on child labor. Youths of any age may deliver newspapers, for example, or perform in television, movie, or theatrical productions.

The farming industry has been fighting the child labor restrictions as well as the rest of the FLSA ever since the law was first proposed in the 1930s, so less-strict rules apply to child farmworkers. For example, children as young as 12 may work on their parents’ farms. And workers as young as ten years old may work for up to eight weeks as hand harvest laborers as long as their employers have obtained a special waiver from the U.S. Labor Department.

Rights Under the FLSA : Compensatory Time

Most workers are familiar with compensatory or comp time—the practice of employers offering employees time off from work in place of cash payments for overtime. What comes as a shock to many is that the practice is illegal in most situations. Under the FLSA, only state or government agencies may legally allow their employees time off in place of wages. (29 U.S.C. § 207(o).)

Even then, comp time may be awarded only:

according to the terms of a collective bargaining unit agreement or

if the employer and employee agree to the arrangement before work begins.

When compensatory time is allowed, it must be awarded at the rate of one-and-a-half times the overtime hours worked—and comp time must be taken during the same pay period that the overtime hours were worked.

Many employers and employees routinely violate the rules governing the use of compensatory time in place of cash overtime wages. However, such violations are risky. Employees can find themselves unable to collect money due them if a company goes out of business or they are fired. And employers can end up owing large amounts of overtime pay to employees if they get caught by the labor department.

a. State Laws
Some states do allow private employers to give employees comp time instead of cash. But there are complex, often conflicting, laws controlling how and when it may be given. A common control, for example, is that employees must voluntarily request in writing that comp time be given instead of overtime pay—before the extra hours are worked. Check with your state’s labor department for special laws on comp time in your area. (See the appendix for contact information.)

b. Alternative Arrangements
Employees who value their time off over their money may feel frustrated with the letter of the law preventing them from taking comp time. If you are in this boat, you may have a few options for getting an arrangement that feels like comp time but is still within the letter of the law.

You may be allowed to take time off by rearranging your work schedule. This is legal if both of the following are true:

The time off is given within the same pay period as the overtime work.

You are given an hour and a half of time off for each hour of overtime worked.

One way is to subtract the time during a single workweek.

But you are not confined to an hour-for-hour trade. You can also take time-and-a-half pay in one week, then reduce your hours the next week so that your paycheck remains constant.

Rights Under the FLSA : Pay for Overtime

The FLSA does not limit the number of hours an employee may work in a week—unless the employee is a minor. But it does require that any covered worker who works more than 40 hours in one week must be paid at least one and one-half times his or her regular rate of pay for every hour worked in excess of 40.

There is no legal requirement under the FLSA that workers must receive overtime pay simply because they worked more than eight hours in one day (although a few states require it). Nor is there anything that requires a worker to be paid on the spot for overtime. Under the FLSA, an employer is allowed to calculate and pay overtime by the week—which can be any 168-hour period made up of seven consecutive 24-hour periods.

It is custom, not law, that determines that a workweek begins on Monday. However, the FLSA requires consistency. An employer cannot manipulate the start of the workweek to avoid paying overtime.

Also, because of the nature of the work involved, common sense—and the law—both dictate that some jobs are exempt from the overtime pay requirements of the FLSA.

The most common of these jobs include:

commissioned employees of retail or service establishments

some auto, truck, trailer, farm implement, boat, or aircraft workers

railroad and air carrier employees, taxi drivers, certain employees of motor carriers, seamen on American vessels, and local delivery employees

announcers, news editors, and chief engineers of small nonmetropolitan broadcasting stations

domestic service workers who live in their employer’s residence

employees of motion picture theaters, and

farmworkers.

And, finally, some employees may be partially exempt from the Act’s overtime pay requirements. The most common of this hybrid type is an employee who works in a hospital or residential care establishment who agrees to work a 14-day work period. However, these employees must be paid overtime premium pay for all hours worked over eight in a day or 80 in the 14-day work period, whichever is the greater number of overtime hours.

In addition to the FLSA overtime provisions, a number of state laws also define how and when overtime must be paid. Some states measure overtime on a daily, rather than weekly, basis. In these states, workers who put in more than eight hours a day are generally entitled to overtime, even if they work a total of 40 or fewer hours in a week. The chart that follows summarizes state overtime rules for private employers. Note that if the federal and state law conflict, your employer must obey the stricter law—that is, the law that provides the most expansive rights to you.

Some employers have tried to skirt the overtime pay requirements by labeling part of the pay received as a bonus. In fact, bonuses have a strict legal definition, being reserved only for money paid in addition to wages because of some extra effort you have made on the job, as a reward for loyal service, or as a gift.

While the term bonus has a grand ring to it, be skeptical if you receive one too often. And take the time to do some math to discover whether the bonus is an apt description for the sum you receive—or a ploy to circumvent the laws requiring overtime pay.

Rights Under the FLSA : Equal Pay for Equal Work

Men and women who do the same job, or jobs that require equal skill and responsibility, must be compensated with equal wages and benefits under a 1963 amendment to the FLSA called the Equal Pay Act. (29 U.S.C. § 206.) Be aware, however, that some payment schemes that may look discriminatory at first glance do not actually violate the Equal Pay Act. The Act allows disparate payments to men and women if they are based on:

seniority systems

merit systems

systems measuring earnings by quantity or quality of production, such as a piece goods arrangement, or

any factor other than sex—for example, salary differentials that stem from unequal starting salaries based on differences in experience levels.

Although the Equal Pay Act basically covers the same employers and employees as the rest of the FLSA, there is one important difference: The Equal Pay Act also protects against discriminatory pay arrangements for executive, administrative, and professional employees—including administrators and teachers in elementary and secondary schools.

Talking It Over with Your Employer

Analyzing Your Options
If something is amiss in your workplace and you have turned to watercooler wisdom, commuter train tales, or locker room skinny, you may have come away with the same urging: Sue.

For most people, that is bad advice. The courtroom is usually the worst place to resolve workplace disputes. Most of them can be handled more efficiently and much more effectively in the workplace itself—through mediation, arbitration or, most often, by honest conversation.

If you have suffered an insult, an injury, or a wrong at work, you are probably feeling angry or hurt. If you have lost your job, you may be hurting financially, too. All of this is likely to cloud your ability to make well-reasoned decisions. So go slowly. Decide what you want to gain. If an apology from your employer would suffice, save yourself the time and expense of filing a legal action.

Do not overlook the obvious: First try talking over your workplace problem with your employer. An intelligent discussion can resolve most wrongs—or at least get your differences out on the table. Most companies want to stay within the law and avoid legal tangles. So the odds are that your problem is the result of an oversight, a misunderstanding, or a lack of legal knowledge.

Here are a few tips on how to present your concerns to your employer or former employer:

Know your rights. The more you know about your legal rights in the workplace—to be paid fairly and on time, to do your job free from discrimination and retaliation, to labor in a safe and healthy place—the more confident you will be in presenting your problem.

Specific penalties that may be imposed on employers who violate them. Your best course is probably not to sue your employer over a violation of a law requiring paid time off for jury duty or a single miscalculation of overtime pay. But knowing whether a particular transgression can be punished with a fine, a criminal conviction, or an order to rehire you is the kind of information that can make your employer take your complaint more seriously in the bargaining process.

Stick to the facts. Keeping your legal rights firmly in mind, write a brief summary of what has gone wrong and your recommendation for resolving the problem. It often helps to have someone who is more objective, such as a friend or family member, review the facts of your workplace problem with you and discuss possible approaches to resolving it.

Check the facts again. The human memory is not nearly as accurate as we like to think it is—particularly when it comes to remembering numbers and dates. Before you approach your employer with a complaint about your pay, check to be sure your math is correct. If your beef is about a discriminatory remark, be sure you can quote it verbatim. Review all of your written records to make sure you have not overlooked a past event or pivotal memo.

Do not be overly emotional. Recognize that dealing with a workplace problem can be stressful. After all, if you are like most workers, you spend about half of your waking hours on the job. But you also know friends, relatives, and acquaintances who are out of work—and who are having hard times finding new jobs. Acknowledge that these pressures of time and money can make it more difficult to deal with a workplace problem. Then vow to proceed as calmly and rationally as possible.

Do not tolerate abuse. If your job is on shaky ground, try not to jeopardize it further by losing your temper and getting fired as a result. A calm presentation of a complaint is always better than an emotional confrontation. Remember the common wisdom that it is easier to find a new job while you still have your old one. At the very least, it’s easier to blaze a new career trail if you leave no muddy tracks behind you.

Be discreet. Discussions of workplace problems are often very personal and should take place privately—not in front of coworkers. Employment problems can be divisive not only for those involved, but for an entire workplace. You don’t want to be justly accused of poisoning the workplace atmosphere or of filling it with disgruntled workers forming pro and con camps. Ask for an appointment to discuss your complaint privately with your supervisor or another appropriate manager. If you give that person a chance to resolve your problem rationally and privately, he or she will be more apt to see things your way.