Do I have to maintain health benefits during FMLA leave?
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Employees who take approved FMLA leave are entitled to maintain health benefits coverage during their leave in the same way they were covered before the leave. When you consider the possibility the employee is on leave for their own medical condition, or that of one of their insured dependents, it’s logical that coverage must continue while they’re out on leave to cover any medical expenses.
Employers must continue coverage for staff during the entire leave, making the same payments as before. This can often pose a problem. If the employee was responsible for a portion of the contribution for their benefits, but they’re on unpaid leave, there is no paycheck for the employer to deduct the staff member’s healthcare payment.
Some companies ask employees on leave to make cash payments for their portion of the coverage while on leave. Others allow staff members to repay the outstanding deduction when they return to work. Neither option is ideal: employees on unpaid leave may not have the financial resources to contribute their portion of the payment. If you allow employees to delay repayment and they don’t return from leave, the employer will lose those funds. They may try to collect the money from the ex-staffer, but that’s often difficult to do.
Also, if you allow an employee to repay their portion of healthcare contribution when they return to work you’ll have to take care not to make too many payroll deductions from their salary too soon. Assuming the staff member returns after a 3 month leave (12 weeks) that coincided exactly when premiums were due. They would owe 3 month’s worth of back-premiums, and future premiums will also be deducted from their salary. That can represent a significant portion of their pay, but you might not be able to take it all at once.
When trying to repay the arrears, you will need to make sure they receive a salary that is at least the minimum wage required by law in your area. Federally, the minimum wage is $7.25 per hour: it may be higher where you do business. Whatever repayment deductions you take for back-premiums not paid during the leave must not reduce the employee’s salary lower than the minimum wage. You may want to work with the employee to come up with a repayment plan that’s manageable for them financially, but assures you’ll be repaid as quickly as (legally) possible.
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