After 2 weeks of employment we placed a new hire on involuntary "administrative" unpaid leave to restest for a drug screening. 

 Employee was hired and working before "pre-employment" drug screening. We then did the "pre" employment screening, and put him on unpaid leave for two weeks and terminated him at the end if the leave.

 It was during those two weeks that he would have become eligible for medical benefits. As we knew we were going to termintate him, we told the healthcare provider NOT to initiate his enrollment. We then sent the employee a termination letter backdating his termination date by two weeks to the date unpaid leave began. 

Can we set the termination date back to last "paid" workday?

Can we deny medical benefits because we placed him on leave right before activation date?

 thanks

Thanks

Did the first test come back positive or have some other problem? How long did you wait to do the pre-employment testing? I am assuming that he failed the second test and that was the reason for termination.

I agree with TX.  If you placed someone on involuntary "administrative" unpaid leave, they are still an employee of your company until you reach a decision to terminate them at which point they are no longer employed. 

It sounds like you either need to halt your hiring process until a confirmed drug test can be obtained or move your benefit period back so that new hires are not eligible for insurance so quickly after being hired.  That would have to be done during an open enrollment with your insurance provider.