As St. Vincent’s Hospital shuts down and terminates 3,500 of its employees, many face a dire predicament: the dual shock of losing both their income and health insurance. St. Vincent’s is discharging its employees with little if any advance notice, leaving many wondering how they will support themselves and pay for their ongoing medical treatment and drugs – much less emergency care. These abrupt shutdowns and bankruptcy filings focus attention on the plight of workers who experience the sudden loss of jobs plus the loss of company health insurance. This double dose of pain draws attention to employees’ legal rights, according to the national employee rights law firm of Outten & Golden LLP.
Fired employees are entitled to notice.
Jack A. Raisner, a partner at Outten & Golden LLP, points out that this scenario has been playing out across the nation during the Great Recession, leading to many angry workers and lawsuits. “A safety net for St. Vincent’s patients exists in the form of other health care providers – but no safety net exists for many employees who suddenly have no health insurance. Non-union employees usually find they have no COBRA to buy-into, no readily available medical insurance plan exists for them, and even if they find it - how will they pay for it?” According to Raisner, that’s one reason why written notice is so important, in fact, it’s the law under the WARN Act.
A little more than a year ago, New York enacted its own version of the federal WARN Act (Worker Adjustment and Retraining Notification Act), which requires covered employers to provide employees with 60 days advance written notice that they will be losing their jobs in a mass layoff or shutdown. New York’s WARN Act requires 90 days notice. According to Raisner it does not appear from reports that such notice was given to the employees of St. Vincent’s, just as it was not given in St. John’s Queens and Mary Immaculate Hospitals, Curry v. Caritas Health Care, Case No. 09-40901, U.S. Bankruptcy Court for the Eastern District of New York, nor in Fortunoff, Iannacone v. Fortunoff, Case No. 09-10497 (RDD), U.S. Bankruptcy Court for the Eastern District of New York, cases where Outten & Golden LLP has brought claims on behalf of former employees who were terminated in alleged violation of the federal and New York WARN Acts. “The employees must scramble to figure out how to deal with the loss of income and, at the same time, find substitute health insurance or a way to pay steep bills for care and prescriptions from their limited savings,” says Raisner.
Attorney René S. Roupinian, who co-chairs Outten & Golden LLP’s WARN Act Group, which provides eligible employees who receive less than 90 days termination notice up to 60 days back pay and benefits which include medical expenses incurred due to lack of health insurance during the notice period.
“Many employees do not realize that when an employer goes out of business, health insurance plans are usually terminated along with the employees,” Roupinian says. “Now that St. Vincent’s has filed for bankruptcy, it is expected there will be a loss of health insurance. Employees are often let go with no insurance to pay for necessary prescriptions and medical procedures for themselves and their families. It’s a harsh reality and can often be more devastating than the sudden loss of income.”
It remains to be seen how St. Vincent’s shutdown will affect the terminated employees, but they should know that they may have rights and recourse to soften the blow of unemployment that has affected so many in the healthcare industry and economy to date.