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Remind employees: They must continue to pay health insurance premiums while on FMLA

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in Employee Benefits Program,FMLA Guidelines,Management Training,Small Business Tax Deduction Strategies

Employees out on unpaid FMLA leave are still entitled to health insurance benefits if they were covered before going out on leave. However, if the employee was required to pay part of the premium before taking leave, that obligation continues.

If he skips any payments, the employer can terminate coverage without violating the FMLA insurance-maintenance provision.

Recent case: Shelby Lampley claimed that while he was out on FMLA leave, his employer cancelled his health insurance. He sued.

But he had to admit under oath that he had not paid his part of the health insurance premium. The em­ployer had paid its share until Lampley stopped paying.

The 11th Circuit Court of Appeals said the employer did nothing wrong. Employees must continue paying their previous share of premiums while on leave to keep insurance in place. (Lampley v. IMS Management Services, No. 10-11543, 11th Cir., 2011)

Final note: Handling premium payments in these cases can be tricky. Ordinarily, the employee’s portion is handled via payroll deduction. Be sure to discuss this practical matter with the employee before he goes out on FMLA leave. Many employees don’t realize that they have to continue the premium payments in order to maintain coverage.

You may even find that some employees will want to return to work sooner when they realize they have to come up with their share of premiums.

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