Legal Forum: Continuing Employee Benefits After An Accident

January 21, 2004
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Question:
An employee hurt his neck in a hit-and-run accident in my vehicle. The doctors and the workers' compensation carriers have failed to rehabilitate this person, and it is more than six months since the accident. He may not ever return to this industry in the same capacity. How long is an employer obligated to continue company benefits such as medical insurance, and how can this person be properly discharged?

Reply:
My answer is a little more vague than usual because the questions posed can be complicated to sort out and may depend to a great extent on specific circumstances and the state in which the employer and employee are located.

Questions regarding benefits and other aspects of employment law depend to a great extent on the facts of each situation and the laws of particular states.

With respect to the question of how long an employer is required to provide benefits such as medical insurance to an employee who is injured on the job, the old rule developed by the courts was that an employer generally did not have a duty to provide medical care to an injured employee unless the employee was injured as a result of the employer's negligence.

Today, however, this "common law" rule has been modified by a host of federal and state laws that can affect an employer's obligations to provide benefits. For example, at the federal level, the Family and Medical Leave Act (FMLA) imposes a variety of obligations on companies that employ at least 50 workers. The FMLA requires employers to provide eligible employees with 12 weeks of unpaid leave within a 12-month period for certain specified reasons, including inability to work because of a serious medical condition; a number of states have similar laws.

In addition, the federal Employee Retirement Income Security Act of 1974 (ERISA) governs many aspects of employee benefit plans. Under the requirements of federal law passed as part of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), employers that offer benefit plans that are subject to ERISA (as well as employers offering certain other types of plans) may be required to provide continuing medical benefits for 18 months to employees who are terminated.

A variety of state laws - including workers' compensation laws - can also influence the amount of time that an employer must provide benefits to an injured employee. Perhaps most importantly, the provisions of the benefit plan provided by an employer to its employees, which in essence serves as a contract between employer and employee, will dictate many aspects of the medical coverage and other benefits provided to an employee.

As for termination, the traditional rule is that a contract for employment can be terminated if the employee is no longer able to perform the functions of the job. As a result, an employer may well be able to terminate an employee who can no longer perform the job that he or she was hired to do, particularly if the disability has already lasted for six months or more.

However, the circumstances under which an employee with a disability may be terminated may depend on both federal and state laws. Many companies that deal with the public have become familiar with the requirements of the Americans With Disabilities Act (ADA) that relate to providing reasonable accommodations to members of the public that are disabled.

However, the ADA in some circumstances also requires companies that employ 15 or more people to provide a "reasonable accommodation" to employees with disabilities, which for purposes of the act are defined as physical or mental impairments that substantially limit one or more "major life activities," such as sitting and standing.

Thus, if the injured worker in our example could in fact continue to perform his old duties if some changes were made to his work environment, his schedule, etc., the employer might be required to accommodate the employee by offering to make such changes if they did not cause undue hardship to the employer.

A variety of state laws can also limit the ability of an employer to terminate an employee who can no longer perform a job because of a disability.

Author Tom Jackson is an attorney with the Washington law firm of Kelley, Drye & Warren, LLP.

Note: This feature is intended only as a forum for information and general discussion. Any information provided is not in the nature of legal representation and is not intended to establish any attorney-client relationship. Any information provided should not be relied on without consulting an attorney to discuss the specific facts relevant to your situation.

Publication date: 01/26/2004

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