When an employee goes on a prolonged leave of absence, companies often encounter challenges regarding the continuation of health insurance. To ensure adherence to regulations, employers must carefully review plan terms, COBRA regulations, and FMLA provisions.
Navigating Plan Eligibility
Employer-sponsored health plans typically have specific service criteria for eligibility. If an employee's hours dip below the threshold during a leave of absence, their coverage could be impacted.
Understanding FMLA Regulations
Employers governed by the Family and Medical Leave Act (FMLA) are required to uphold health benefits throughout the leave period, treating the situation as if the employee were actively on the job, which includes maintaining premium payments. However, coverage may cease if the employee elects not to return to work at the conclusion of FMLA, triggering potential COBRA application.
COBRA Continuation Rules
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), workers have the option to sustain coverage at their own cost after experiencing a qualifying event such as an extended leave. Employers must ensure adherence to avoid fines and issues with coverage.
Leave Management Protocols
While some companies opt to sustain coverage during employee leaves, improper handling can result in coverage refusals and penalties. Employers need to grasp plan stipulations and establish unambiguous policies to effectively oversee leave situations.