Question: When an employee is on Family and Medical Leave Act (FMLA) leave, what is the employer required to do with the employee’s other benefits? Which benefits need to be continued and what should we do if the employee does not make his co-payments while out on FMLA?
Answer: FMLA regulations require that employers continue to provide group health benefits under the same terms and conditions as was provided to the employee prior to leave. Continuing any other nongroup health benefits during the FMLA leave is up to the company’s policies and practices. Any benefits that would be maintained if the employee was on another form of leave must be maintained while the employee is on FMLA leave.
Part of the requirement to continue health insurance benefits “under the same terms” means that both the employer and employee must continue to pay their portions of the premium, if that is the employer’s normal policy during leaves. If the employer notifies the employee of this fact, and the employee fails to pay his or her portion of the premium, the employer may be able to cancel the group health benefits.
In order to cancel benefits for someone on FMLA leave, the employer must allow the employee at least a 30-day grace period to make payment after the original payment due date. Additionally, the individual must receive written notice at least 15 days prior to the actual cancellation. The best practice is to send a pending cancellation notice once the employee is 15 days past the payment date. One important item to note is that even if an employer cancels an employee’s health coverage under these terms, the employer is still required to restore coverage once the employee returns from FMLA leave. The employee must receive coverage and benefits equal to what he or she would have if he or she had not been on leave and had not missed the premium payments.