Employer Contract - Health Insurance

[SAMP]

Jurisdiction

Georgia

Left a good job with full benefits to work for a start-up. Employment contract stated exactly:

"Benefits: Healthcare benefits will be available in next 30-60 days."

We are coming up on the 60 days, and no healthcare has been made available. They are researching, exploring, getting input, etc. The plans that are being offered are also highly-priced, and the company is giving a small reimbursement for it. Currently, spouse and I are paying on our own out of pocket for outside insurance.

Per the contract verbiage, if I need to quit to find other opportunities that do offer health insurance, is this a valid reason to sue for breach of contract and get unemployment from the state as well? Please advise.

 

[Tax Counsel]

Per the contract verbiage, if I need to quit to find other opportunities that do offer health insurance, is this a valid reason to sue for breach of contract and get unemployment from the state as well? Please advise.

The Georgia state Department of Labor says the following about quitting your job and getting unemployment:

If you quit, you may be eligible to draw benefits if you can show that you quit for good work-connected reason(s). Examples of good work-connected reasons are material change in working conditions, material change in working agreement, nonpayment for work, and similar reasons. You will not be able to draw benefits if your reason for quitting was personal even though the personal reason was a good or compelling one. The only way to know for sure whether you are eligible if you quit is to file a claim. The department cannot make a predetermination of eligibility before a claim is filed.
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Whether the lack of the promised health insurance is a "good work-connected reason" is something I cannot answer. You'd need to apply and see what the state says.

As for suing for breach of contract, I see a significant problem with it. The company does not appear to say that it would pay any part of the health insurance the company offers. Moreover, unless you had a contract that guaranteed you employment for some set period of time, the company could fire you at any time, in which case any insurance you had through the company would terminate. So how would you compute the damages from the company failing to offer the health insurance? Since the company is not committed to pay for any of it, you're not losing anything from the company not offering it now.

 

[SAMP]

The Georgia state Department of Labor says the following about quitting your job and getting unemployment:

If you quit, you may be eligible to draw benefits if you can show that you quit for good work-connected reason(s). Examples of good work-connected reasons are material change in working conditions, material change in working agreement, nonpayment for work, and similar reasons. You will not be able to draw benefits if your reason for quitting was personal even though the personal reason was a good or compelling one. The only way to know for sure whether you are eligible if you quit is to file a claim. The department cannot make a predetermination of eligibility before a claim is filed.
​

Whether the lack of the promised health insurance is a "good work-connected reason" is something I cannot answer. You'd need to apply and see what the state says.

As for suing for breach of contract, I see a significant problem with it. The company does not appear to say that it would pay any part of the health insurance the company offers. Moreover, unless you had a contract that guaranteed you employment for some set period of time, the company could fire you at any time, in which case any insurance you had through the company would terminate. So how would you compute the damages from the company failing to offer the health insurance? Since the company is not committed to pay for any of it, you're not losing anything from the company not offering it now.

Some more background: the company is offering to get "company health plans", split the cost to be taken out between each paycheck, and give us about 10-15% back in reimbursement via check monthly.

 

[Zigner]

Some more background: the company is offering to get "company health plans", split the cost to be taken out between each paycheck, and give us about 10-15% back in reimbursement via check monthly.

They could get a company health plan and require you to pay 100% of it, and that would still comply with what you say was written. Additionally, was this a "contract", or an offer letter? That's something you would need to discuss with an attorney to know for sure.

 

[zddoodah]

if I need to quit to find other opportunities that do offer health insurance, is this a valid reason to sue for breach of contract

For starters, you said that the contract says that health insurance will be provided "in the next 30-60 days," but that 60 days haven't passed. Thus, nothing has been breached. Second, the document you're describing as a contract probably isn't enforceable as such. Does this contract limit the employer's ability to fire you? If not, then pretty much any change to the conditions of your employment can be changed unilaterally by the employer. Third, what would your damages be?

As far as unemployment, if your medical needs are so urgent that you cannot exist without a job that provides medical insurance and cannot obtain a policy on your own, then you might be able to obtain unemployment. That said, I think any purported "need" for medical insurance is questionable given that you said you left a "good job" that provided such benefit.