This question was recently asked of the ThinkHR Hotline team: What benefits must be continued while an employee is on Family and Medical Leave Act (FMLA) leave? What should we do with an employee who is not making his share of the copayments while out on leave?
Their expert answer: Family and Medical Leave Act (FMLA) regulations require employers to continue group health benefits under the same terms and conditions as if the employee were actively at work. There is no FMLA requirement to continue other voluntary benefits; whether those continue depends on your established policy and on how you treat similar non-FMLA leaves.
Part of the requirement to continue health coverage "under the same terms" means both the employer and the employee must continue to pay their portions of the group health insurance premium, unless the employer has a different written policy for leaves. The employer must notify the employee of the payment requirements while on leave, including the amount due, the due date, and where to send the payment. For additional employer guidance on related benefits and leave issues, see FMLA, HSAs, Workplace Alcohol Risks, Health Plan Ads, and Wellness Programs.
If the employee fails to pay their share of the premium, an employer may be able to suspend group health benefits for the remainder of the FMLA leave. Before suspension, employers must allow a 30-day grace period after the original payment due date and must provide written notice at least 15 days before the actual suspension. It is best practice to send a pending suspension notice once the employee is 15 days past the payment date.
Important: if coverage is suspended for nonpayment during FMLA leave, you must restore the employee's coverage without penalty or delay when they return to work, to the same level of coverage held prior to leave (unless other plan rules apply). If the employee does not return from FMLA leave, an employee whose coverage was suspended for nonpayment may be eligible for continuation coverage under COBRA or similar state law.
For context on how FMLA interacts with insurance and employment practices, employers may also find useful information in Insurance and Employment Law: ACA, Medical Cost Sharing, FMLA, Coats v. Dish Network, and Med Pay.
If you need help interpreting plan terms or your obligations, talk to an agent to review your specific situation and procedures for handling premium payments during leave.
Don Phin, Esq., is VP of Strategic Business Solutions at ThinkHR and has decades of experience in HR and employment law. ThinkHR provides resources and support to help employers manage leave, benefits, and compliance.
Frequently Asked Questions
Which benefits must I continue for an employee on FMLA leave?
Employers must maintain group health plan coverage on the same terms as if the employee were working; continuation of other voluntary benefits depends on employer policy.
What happens if the employee doesn't pay their share of premiums while on leave?
An employer may suspend coverage after a 30-day grace period and must provide at least 15 days' written notice before suspension; coverage must be restored upon the employee's return.
Does an employer have to refund missed premiums if coverage was suspended?
If coverage was properly suspended for nonpayment, restoration upon return is to the same level of coverage, but plan rules determine whether missed premiums are refunded; consult plan documents.