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Employee Failure to Pay Premiums Under FMLA Protected Leave

Question: 

An employee on FMLA protected leave of absence has stopped paying for their health insurance premiums, is it safe to terminate their health coverage?

Answer:

If the employee is on FMLA protected leave, absent any written policy that provides a longer grace period, the regulations require an employee receive a 30-day grace period to pay for benefit premiums before health coverage can be terminated. In addition, employers are required to provide the employee a written notice at least 15-days prior to the end of the grace period informing the employee that benefits will be terminated if payment isn’t received. It’s recommended the written notice be sent via certified mail as well as in an electronic format (if the employee has communicated via email in the past). Over Communication, in this case, is beneficial.

If the employee is not on FMLA protected leave – the existing policy, practice or precedent for how similar situations have been handled (non-FMLA related leaves) should dictate how to proceed as practices should be consistent. For ease of administration, it may be beneficial to handle the non-payment of benefit premiums for non-FMLA protected leaves in the same fashion – even if by doing so is more than is legally required.

For someone who is not yet on a formal leave of absence but may be out due to medical reasons, a formal memo should be sent to the employee. The memo should outline the employee’s requirement to notify the employer of the reason behind their absence, documentation to support the need for a medical leave (if applicable), and what accommodations (if any) may be needed. The memo should also outline the employee’s responsibilities for payment of health insurance premiums. Once again, prior to terminating health insurance, the memo should be provided to the employee, a minimum of 15 days prior to terminating health coverage.

For additional information, visit https://webapps.dol.gov/elaws/whd/fmla/9d3.aspx

strategic HR inc. is ready to assist you with any of your challenging situations around Benefits and Compensation. We offer assistance with everything from job descriptions to policy development to help address your difficult issues that impact employee compensation or benefits. Please visit our Benefits & Compensation page for more information on how we can assist you.