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Leaves and Insurance
Benefits & Compensation
Leaves and Insurance
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I would love to know how other companies handle this. We offer FMLA and following that, if necessary, 60 days of personal leave. In many cases associates do not mail in their premium payments. IF they
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Forums » Topic Forums » Benefits & Compensation » Leaves and Insurance
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Leaves and Insurance
posted at 2/24/2009 5:44 AM EST
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Posts: 198
First: 5/6/2006 Last: 8/29/2011 |
I would love to know how other companies handle this. We offer FMLA and following that, if necessary, 60 days of personal leave. In many cases associates do not mail in their premium payments. IF they come back to work, the arrears payments come back out of their first, or first few paychecks until they are caught up, however there are many who never come back. If insurance remains in effect through this period, we are on the hook for the premiums and the claims. I'd like to know how other companies handle this issue - such as, at what point do you termiante insurance coverage. Do you do so retroactively? How does this effect the window in which you send out Cobra. Thanks for any insight you can give me on your company's practices. |
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Leaves and Insurance
posted at 2/24/2009 5:57 AM EST
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Posts: 30
First: 1/29/2009 Last: 11/24/2009 |
While an employee is FMLA leave health insurance must be maintained by the employer for 12 weeks. After the 12 weeks employers are no longer obligated to continue coverage. If I were you I would make the employee sign something stating that they will maintain his or her premiums during leave. I should also state that the company will not maintain health insurance after 12 weeks if the employee is not making their premium payments. As for COBRA, you have 30 days from a qualifying event to notify them of their insurance cancellation. You would not be able to go back more than 30 days. And this 30 days cannot be while covered under FMLA. |
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Leaves and Insurance
posted at 2/24/2009 6:16 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Agree with KPowers. The best way to do this is to have a plan/process upfront setup before the employee taked FMLA leave. You can require that they mail in their part of the premiums and if they do not, then you can cancel coverage during FMLA:
http://www.dol.gov/elaws/esa/fmla/eb2.asp "If for some reason the employee is dropped from coverage of the group health benefit plan while on FMLA leave (the employee may elect not to continue coverage while on unpaid leave, or may fail to make premium co-payments as required) at the time the employee returns to work the employer must restore the group health benefit plan to the employee." To try to recover when/if they come back can be more of a nightmare. If the employee KNOWS ahead of time that they have to pay their part, then it is better for all concerned. And here are the actual regs on how you can set up the payments: http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_825/29CFR825.210.htm |
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Leaves and Insurance
posted at 2/24/2009 10:47 AM EST
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Posts: 198
First: 5/6/2006 Last: 8/29/2011 |
Thank you for the information thus far. When an associate goes out on FMLA, part of their "packet" is a letter explaining the responsibility of the associate of making the required benefits payments, including the amount due each pay period. We even started including payment coupons to assist them. We try to be as employee friendly as possible, understanding that someone on an unexpected unpaid leave may have a difficult time making these payments. Upon their return, we will even "chop" up the payments so their check doesn't come out to 57 cents.
Taking the associates to court to retrieve the payments isn't feasible because of the number of associates and the fact they are spread out over many states. I did read the info on the first link RRupert sent. I understand from this that the associate "must" pay their portions, but there isn't much direction on what to do if they don't. Of course the problem is exacerbated by the additional 60 days of personal leave offered. Its an issue we are trying to come up with a way of resolving, that can be consistent in all cases. One suggestion is to terminate the insurance at the end of the FMLA, however if they take their PLOA and don't come back, then the window to offer Cobra has passed. Its turned into a very muddy issue. I appreciate all the comments and advice. |
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Leaves and Insurance
posted at 2/25/2009 3:25 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
"I did read the info on the first link RRupert sent. I understand from this that the associate "must" pay their portions, but there isn't much direction on what to do if they don't." --
The answer to this is that you drop their coverage during the rest of their FMLA timeoff for failure to make the premium and then offer the required reinstatement when then come back from FMLA. That is directly stated in the link I provided. "One suggestion is to terminate the insurance at the end of the FMLA, however if they take their PLOA and don't come back, then the window to offer Cobra has passed. Its turned into a very muddy issue. I appreciate all the comments and advice." -- At this point, at the end of FMLA, you must offer COBRA -- it becomes a qualifying event since they lose eligibility due to the reduction in hours (see http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.HTML for backup) ...you would not wait the 60 days. The employee could pay COBRA for the 2 months (60 days) and then return to your plan depending on how your eligibility is setup. You need to check with your carrier to see if your contract is written such that you can even carry them for those 60 days without sending them to COBRA. If your carrier does allow them to stay on for the 60 days and the company continues their benefits for those 60 days, then they would become COBRA eligible on the 61st day if they do not return to work. So they can't lose the chance to take COBRA regardless of which way you go. The best thing you can do is check with your insurance agent/carrier to make sure you are following the contract. |
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