Under FMLA regulations, health insurance coverage isn't absolute

by on February 2, 2009 · 0 Comment POSTED IN: HR Info Center

FMLA guidelines say employees have to make health insurance premium payments

Here’s a brainteaser: It’s clear that an employer must maintain health coverage for employees on Family and Medical Act leave. But do you have to do so even if they fail to pay their share of the premium?

FMLA regulations say no.

That answer was underlined recently by a case involving a Tennessee employer. The employee took FMLA medical leave for emotional problems, but was fired when he failed to return to work at the end of the leave.

COBRA WASN’T JUSTIFIED UNDER FMLA REGULATIONS

He sued the employer for failing to properly offer him COBRA healthcare continuation coverage under FMLA regulations. The federal court hearing the case said he wasn’t entitled to COBRA protection.

Why?

The employer’s policy mandated that employees on FMLA leave keep paying their share of their healthcare premiums. The company provided coupon books for that purpose. Under the policy, employees who failed to make the premium payments had their coverage cut off. When the employee in question didn’t make his payments, the company stopped his coverage, four months before his termination. And so, the court said, the termination didn’t represent a COBRA qualifying event – as it would have if he’d been covered at the time of the termination.

KEY POINTS
Here are the key points for you to remember from the court ruling:

  • You can require employees to maintain their share of healthcare premiums during FMLA leave, and interrupt their coverage if they don’t.
  • When employees whose coverage has been interrupted return to work after FMLA leave, you must reinstate them in your health plan.
  • If such employees don’t return to work, you may cancel their coverage, except as required by COBRA. And in most such cases, COBRA won’t apply.

Cite: Jordan v. Tyson Foods, No. 06-6601, 6th Cir., 12/19/07.

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