At 501(c) Services, we operate an HR consulting service (the Nonprofit HR Hotline) for our thousands of nonprofit customers. From time to time, several nonprofits will call to discuss the same topic. When that happens we issue a Frequently Asked Member Question in our monthly customer newsletter. This month we covered what happens to benefits premiums when an employee goes on FMLA Leave.
When an employee goes on FMLA leave and has health benefit premiums that need to be paid (in whole or in part), the employer, by law, must maintain the employee’s group health insurance benefits for the entire duration of the FMLA leave. The health coverage must be kept at the same level under the same conditions it would have been if the employee had continued working if not for the leave of absence under FMLA.
An employer must tell an employee in advance and in writing about any requirements on how to make payments to keep the health coverage during the FMLA leave, the terms and conditions required for making payments, as well as the consequence of not making timely payments.
Also, it’s important to be aware of the requirement that the health care benefits be reinstated when the employee returns from FMLA leave. It’s recommended, and is a good idea, to pay the employee’s share of the premiums during unpaid leave. Those premiums may be recovered when the employee returns to work. Employers may also recover their portion of premiums paid for maintaining an employee’s health coverage if the employee fails to return to work at the end of FMLA leave for reasons other than its continuation, the recurrence or onset of a serious health condition, or other circumstances beyond the employee’s control.
For more information about our Nonprofit HR Hotline, click here.
