Health Coverage Obligations under the FMLA

Untangling the Family and Medical Leave Act (FMLA) health care
coverage requirements can be a daunting task. What coverage must be
maintained when an employee takes leave and what coverage is the
employee entitled to upon reinstatement? Who pays the premium is
another tricky area.

Although the FMLA allows you to terminate insurance coverage for
nonpayment of premiums or permits your employee to drop the
insurance while on unpaid leave, either scenario could cause problems
when the employee returns to work and must be restored to full
coverage. A review of FMLA guidelines will help you make the right
decisions about maintaining health care benefits and paying premiums
when an employee requests FMLA leave. (Click to download a free FMLA Checklist.)FMLA Health Care Coverage Guidelines

The FMLA, which requires covered employers to provide up to 12
workweeks of leave to eligible employees for various family and medical
reasons, has specific requirements about continuation of health care
coverage when leave is taken and about how you should handle
payment of premiums. In addition, upon return to work, the employee
must be fully restored to health care coverage subject to any changes
that may have occurred. Each of these topics is addressed, below.

-- Continuation of coverage. If you provide health care benefits
under a group health plan, you must provide the same health benefits
during an eligible employee's FMLA leave as would have been provided
if the employee worked throughout the leave. (If you do not provide
insurance before the leave is taken, the FMLA does not require you to
provide it during the leave.) In addition, your obligation to continue
health benefits ends when the employee notifies you that he will not
return to work from the leave. However, the notification must be
unequivocal in order to discontinue health benefits. If the employee
indicates he may not be able to return to work, but wants to, you must
continue to provide health benefits for the duration of the FMLA leave.

Note, too, that employees on unpaid leave may elect to discontinue
health insurance coverage (unless the employer pays the employee's
share of premiums) during the unpaid period of FMLA leave. However,
these employees still must be reinstated to the same insurance benefits
when they return to work.

-- Payment of premiums. The FMLA requires you to pay the
premium on health care coverage on the same terms as you paid the
premium before the employee took leave, paid or unpaid. Therefore, if
you paid 80% of the premium before the employee took leave, and the
employee paid 20%, you must continue to pay at least 80% of the
premium after the employee takes leave. You also may be more
generous, for example by paying the employee's share.

-- Reinstatement of coverage upon return to work. Upon return,
the employee must be restored to the same health benefits coverage as
provided prior to leave, subject to any changes in benefit levels that may
have occurred during the leave. A returning employee may not be
required to meet any qualification requirements normally imposed for
entry or reentry into the group health plan, including any preexisting
condition waiting period or medical examination requirements.


Make sure your company has the HR Policies needed to justify your HR decisions. Furthermore, nothing can replace old fashioned employee training and compliance documentation.