Health insurance coverage during non-paid leave of absence?

Jack Judd Retired • June 7, 2013

In the situation above, it seems the employee would be taking leave for their own disability or maybe the leave would be FMLA related. In both of these circumstances, I believe it would be common for the company to continue to provide health insurance benefits under the same financial parameters as experienced before the leave. If an employee takes a leave for other reasons, I think it is common for the employer not to continue coverage for health benefits but I expect that COBRA policies would kick in.

Wayne Spivak President & CFO • June 7, 2013

The problem arises when you have a policy that says X, and then you start making exceptions. Those who aren't excepted now have a bone (and maybe legal) of contention.

This is a discussion that should be had with both your CLO and CTO (or in old parlance, your lawyer and HR person).

TERESA KIM Accountant • June 7, 2013

Jack and Wayne, Thank you for your advises.
The FMLA rules says it is applicable for companies with more than 50 employees.
But our company has less than 50 employees.

How about other companies like ours?
Do they adopt the FMLA rule as their policy?
And how about non-FMLA-qualifying cases?

Thank you again.

1

Wayne Spivak President & CFO • June 8, 2013

Regardless whether it is legal or not (see my previous post): Exceptions, like salaries paid, are always known.

People talk. People get jealous. Jealousy leads to morale issues, which leads to productivity issues.

BTW, in a prior company we adopted FMLA (for pregnancy; for the women, partially for the one man, but he was a workaholic and didn't want more time, so the issue never was fully resolved).

Would we have done it for other issues, I don't know, it never came up. Based on how we dealt with employees, I'd say yes.

But, like any policy, it needs to be even-handed and administrative judiciously to prevent abuse.

Pete DeWeese EVP & CFO • June 10, 2013

For any unpaid leaves of absence we continue the coverage, but the employee must continue to timely pay their portion of the benefit costs. If the leave exceeds 13 weeks we then terminate the person and they must elect cobra to continue coverage. The key is to have any of these policies in writing and as others have commented to apply the rules consistently.

Malak Kazan VP, Special Projects • June 10, 2013

Generally it is handled like a cobra payment being mindful of what is required at federal / state level depending on the type of leave coupled with your company policy. Be consistent and monitor demographics so that unintended discriminatory bias isn't practiced and self-correct if necessary. For shorter leaves (as defined by your company policy; e.g. less than 30 to 60 days), you may want to treat as a non-event and have the employee submit their cost share as a direct payment to the company.

Health insurance coverage during non-paid leave of absence?

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