Question: Can you help us understand what is required for the continuation of group life insurance for employees on FMLA or military leaves of absence?
Answer: Employers do not have to provide any other benefits outside of group health insurance during leave, except as may be required under their own policies. FMLA or USERRA (military) leave, however, is to be treated as “continuous service” (i.e., no break in service) for purposes of vesting and eligibility to participate in benefit plans. If, for example, the plan requires an employee to be working on a specific date to be credited with a year of service for vesting or participation purposes, an employee on FMLA or USERRA leave who returns to work at the end of the leave will be considered as working on the specific date.
Employers also are not required to entitle the employee to accrue any employment benefits during leave, unless those benefits accrue under the employers’ policies for non-FMLA leaves. Employment benefits include benefits such as life insurance, disability insurance, sick leave, annual leave, educational benefits, vacation time, and pensions.
We advise our clients that allowing benefits, other than health benefits, to continue during leave is a policy decision to be made before employees take leave. There may be administrative as well as other problems in not continuing benefits. This is because the law requires that employees be restored to their former positions with equivalent pay, benefits, and seniority when they return to work after the leave. It may be simpler to continue contributions towards benefits such as life insurance because it may be administratively cumbersome to suspend and then resume such benefits.