Covered California Certified Enroller Practice Exam

Can an employer decline group health insurance plans after an employee has been terminated?

1. Yes, if company policy allows

2. No, by law they cannot

3. Yes, during a layoff

4. Only if the employee requests it

The correct answer is: No, by law they cannot

The assertion that an employer cannot decline group health insurance plans after an employee has been terminated is grounded in legal obligations, specifically regarding health coverage for employees. When an employee's termination occurs, the employer must adhere to laws such as the Consolidated Omnibus Budget Reconciliation Act (COBRA). This act requires that covered employees and their dependents have the option to continue their health insurance for a limited period after employment ends, provided the employer had a group health plan in place. Thus, the employer has a legal responsibility to maintain the health insurance option for a certain duration, making the correct response that they cannot decline coverage after termination. Understanding this perspective is crucial as it underscores the legal frameworks designed to protect employees’ rights to health insurance benefits, ensuring that they are not left without coverage immediately after losing their job.