The Continuation of Health Insurance While on FMLA Leave

Employers who are covered by the Family Medical Leave Act must continue to administer the group health benefits for employees who have taken an FMLA-designated leave of absence. The employer must maintain the health insurance benefits in the same manner as if the employee were still engaged in his normal day-to-day work duties. This includes the collection of employee health insurance premiums and permitting life event and open enrollment changes.

Pre-FMLA Coverage

When an employee takes a FMLA leave, the level of coverage must remain the same. If the employee’s level of coverage included the employee and her spouse, she must be allowed to continue with that level of coverage. If the employer required the employee to pay a portion of the premium for her group health coverage, the employee’s portion of the premium must remain the same as it was before she began her FMLA leave. The employer is allowed to increase the premium, if the amount increases for everyone.

Life Event and Open Enrollment Changes

While on leave, the employee still has the right to make the same life event and open enrollment changes that he was entitled to make if he were not on leave. This includes adding a dependent after the birth, adoption or foster placement of a child or changing to individual coverage due to a divorce. If the employer adds a new carrier or adds new health plan options, an employee on FMLA must also have the ability to switch to the new options. An employee who is on FMLA leave is also entitled to make modifications to his health benefit selections during the company’s annual open enrollment period.

Benefits Billing

When an employee goes on FMLA leave, she must arrange to continue to pay the employee portion of the group health benefits premium. An employee may elect or be required to use vacation or sick time during the initial weeks of her FMLA leave. If so, the employee’s group health premiums may be deducted from her paid leave earnings.

Cancellation

An employee may elect to suspend his group health benefits while on FMLA leave. If the employee elects this option, he is entitled to reinstatement when he returns. An employer has the right to cancel the employee’s group health benefit if there is a lapse in payment for a period of 30 days or more. If the employer’s policy requires cancellation due to nonpayment, the employer is required to issue a 15-day notice informing the employee of the intent to cancel. If the employee’s group health benefits are canceled, he is entitled to have them reinstated once he returns.

Reinstatements

If an employee has elected to suspend her group health benefits or if she was canceled for nonpayment, she is entitled to have them reinstated when she returns from her FMLA leave. The employee is not required to go through a new qualification period for the reinstatement, and she does not have to pay any special fees. Her employer has the right to collect any delinquent amounts through the employer’s established policies for collecting arrearages.