Court of Appeals Rules that Employer’s Insurance Payments Must Continue After Former Employee Fails to Pay His Share

We spent A LOT of time discussing the changes to Minnesota’s Duty Disability law this last year.  The new program is in full swing, and while not everyone is clear on how the program is going to work when it comes time for employers to be reimbursed, we are all required to try and play along.  Today, we deal with a portion of the duty-disability law that was NOT amended this last summer.  In Aldean v. City of Woodbury, the Minnesota Court of Appeals was asked to review a decision by the employer to cease its contributions towards an employee’s health insurance after a separated employee stopped paying his share of the premiums.

The employee served his career as a Washington County deputy and then a Woodbury police officer until he resigned in April 2020 due to a duty-related disability.  While he was employed, he remained enrolled in the City’s health insurance plan.  He stayed enrolled in that health plan following his resignation.

The following summer, Aldean found employment with a state agency, and stopped paying his portion of the City’s health insurance premium.  This resulted in the City dropping him from its plan.  One year later, Aldean requested to be placed back on the City’s health plan, but this request was denied.  Aldean sued, seeking the benefits he believed he was owed under the state’s duty-disability laws.  The parties filed cross-motions for summary judgment, with Aldean winning based on the “unambiguous” language of Minn. Stat. 299A.465.  This statute states that it is a public employer’s obligation to “continue to provide health coverage for” a qualifying duty-disabled peace officer or firefighter.  The City appealed.

In its decision, the majority of the discussion revolved around whether it was the intent of the legislature to force employers to continue to provide health insurance coverage even after an employee voluntarily left its employer’s health insurance plan.  The court was adamant that there was nothing ambiguous about the language that required employers to “continue” coverage for employees separated following a duty-related disability. The court stated, “The public employer’s obligation under subdivision 1(c)…is unconditional.”  The court refused to consider the City’s policy arguments, because it would not “usurp the legislature’s role” in making policy decisions.  The court then held that the City had an ongoing obligation to make health-insurance coverage “available” for its former employee, and his decision to allow his coverage to lapse was “immaterial.”

This is a tough decision for the employer (and employers across the state).  Now, employers must keep track of employees even after they choose to not participate in their coverage for a given period of time, and must automatically allow them back on their health plans at the whim of the employee.

While we wait to see how the new duty-disability laws play out, we at least have some clarity on how the courts treat the old laws.  There was definitely some urging on the part of the Court of Appeals for the legislature to address the policy behind the current law, so we’ll be sure to keep an eye out for any changes to the law this year.  As for now, if you, or your organization need assistance with navigating the new duty disability laws, contact Wiley Reber Law, for legal advice that works.