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Question: We sold one of our companies and all of our former employees moved to the new company. At the time of the sale, we offered one employee the option to return to us once we open a new facility (in about a month), and both the employee and the successor company agreed to this arrangement. Can we keep this employee on our benefits and just put him on an unpaid leave of absence until he returns next month?

Answer: Whether or not this is possible will depend on the terms of your benefit plans. Please check your plan documents and/or consult with your broker to determine what types of unpaid leaves allow an employee to remain on your active health insurance coverage and for how long. If this employee is participating in the group health insurance plan at the previous employer, this type of reduction in work hours for an employee would generally trigger COBRA rights. The employee would need to be notified of those rights and given the option to continue coverage. Additionally, the successor employer should follow their own policies in terms of offering health coverage to this employee, if appropriate.

Source:

www.dol.gov/ebsa/faqs/faq_compliance_cobra.html