From the Hotline: Leave and Benefits Continuation

Question: We have an employee on workers’ compensation who recently returned to light duty on a part-time basis. He has now requested a six-month leave of absence for an unrelated reason. How should we handle this request and his benefits during the time off?

Answer: It would depend on the reason for this unrelated leave. If the employee’s previous workers’ compensation leave was not run concurrently with leave covered under the Family and Medical Leave Act (FMLA) and the leave is based on a qualifying FMLA reason, then the employee may be entitled to 12 weeks of unpaid leave, with benefits continuation and job protection rights under the FMLA.

Assuming that the employee is eligible for FMLA protected leave, the company must provide the employee with notice of these protections, the dates of coverage, and how the employee contribution to benefit costs will be handled. The FMLA requires employers to continue providing the employer share of benefit costs for the period of up to 12 weeks of leave. Arrangements can be made for the employee to pay the company directly for his share of benefit costs, or the company can arrange to take the deduction out of wages or paid time off that is substituted for unpaid leave.

As a final consideration, if the employee is not eligible for FMLA protected leave, the rules for termination of benefits and offering of COBRA continuation coverage would be based upon the plan rules for an employee that is out on a leave of absence or has hours that are reduced to result in a loss of eligibility. In this case, the employer may decide if they wish to continue providing employer contributions to benefits and for how long, as long as the application of the rules is consistent for each person on non-FMLA medical leave.