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Who Pays for Health Coverage During FMLA Leave?



QUESTION: Does our company have to pay for employees’ health coverage while they are on FMLA leave?

ANSWER: Your company does not have to pay your employees’ share of health coverage premiums while they are on FMLA leave. However, employers covered by the FMLA (generally, private-sector employers with 50 or more employees and public agencies and local educational agencies with any number of employees) must maintain coverage under any group health plan for the duration of an FMLA leave at the level and under the conditions that coverage would have been provided if the employee had been continuously employed for the duration of the leave. This means that, if your company is covered by the FMLA, it must pay the same share of the health coverage premiums for an employee on FMLA leave as it would have paid if the employee had not been on leave.

The requirement to maintain group health plan benefits during FMLA leave extends to any medical, surgical, hospital, dental, or vision care; mental health counseling; and substance abuse treatment provided under your company’s group health plans. This requirement is not limited to “major medical” plans and applies to all group health plans that an FMLA-covered employer provides to its FMLA-eligible employees, including, for example, health FSAs. Your company cannot require employees on FMLA leave to pay more for coverage than they would have paid if they had remained actively employed instead of taking the leave. Furthermore, the same group health plan benefits that were provided before the employee’s FMLA leave began generally must be maintained during the leave. So, for example, if an employee was receiving family coverage before an FMLA leave, family coverage must be maintained during the leave. In addition, employees on FMLA leave must be allowed to change health plans or benefits to the same extent as if they were not on leave. Likewise, if your company provides a new health plan or changes health benefits or plans, employees who are on FMLA leave at the time are entitled to the new or changed plans or benefits to the same extent as if they were not on leave. Note that your company’s obligation to maintain coverage (and pay its share of the premiums) would end if employees chose to drop coverage during their leaves, failed to pay their share of the premium by the applicable deadline, failed to return to work at the end of the leave, or informed your company of an intent to not return.

Keep in mind that FMLA leave is subject to other rules besides these. Also, it should not be confused with non-FMLA leave during which employees who lose group health plan coverage may be able to elect COBRA and continue group health coverage during the leave at their own expense. For more information, see EBIA’s Group Health Plan Mandates manual at Sections XVII.C (“Maintenance of Group Health Plan Benefits”) and XVII.D (“Paying for Coverage During FMLA Leave”); see also EBIA’s COBRA manual at Section VII.L (“Special Issues: Leaves of Absence”) and EBIA’s Cafeteria Plans manual at Section XIV.O (“When May Participant Elections Be Changed: FMLA Leaves of Absence”).

Contributing Editors: EBIA Staff.

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