There are many different ways that employers can save money when they provide employee benefits. However, this creates a situation in which many companies are tempted to cut corners and deny coverage simply so that their insurance policies can be made more cost effective. In addition to depriving staff members of their health benefits, this is often illegal and subject to the attention of the government.
The practice known as rescission is sometimes used by organizations to retroactively deprive employees of their insurance benefits on a number of different pretexts. Quite a bit of legal wrangling is necessary to do this without breaking the law, but some state governments and federal agencies have recently begun attempting to ban the practice outright.
While there are occasionally grounds for the dismissal of a worker's health insurance, it is rarely a good idea to deny them their benefits simply to save money. Besides inviting the wrath of regulatory agencies down on a business, a lawsuit from a vindictive employee could be just around the corner. Always review benefit eligibility policies and make sure that a benefit consultant has helped in the process so that they can spot any holes or loopholes in a plan that might make it untenable.
