DOL Comments On Cafeteria Plan Payments And The FMLA

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The question before the U.S. Department of Labor (DOL) was whether the Family and Medical Leave Act (FMLA) requires an employer to continue cafeteria plan health payments for an employee on unpaid FMLA leave if company policy requires all employees on unpaid leave of any kind to make their own group health coverage payments.

The employer claimed that if it paid the cafeteria plan allotment for an employee on unpaid FMLA leave, it would be discriminating against employees on other types of unpaid leave whose cafeteria plan allotments were not paid.

 

In rendering its opinion, the DOL relied on an FMLA provision that states: "during any period that an eligible employee takes leave...the employer shall maintain coverage under 'any group health plan'...for the duration of such leave at the level and under the conditions coverage would have been provided if the employee had continued in employment continuously for the duration of such leave."

 

Consequently, it's the DOL's opinion that employees taking unpaid FMLA leave must have that portion of their cafeteria plan allotment allocated to group health insurance premiums paid by their employers in the same amounts as paid prior to the start of FMLA leave.

 

The DOL was quick to point out that an employee's entitlement to benefits other than group health insurance (e.g., holiday pay) during a period of FMLA leave is to be determined by the employer's established policy for providing such benefits when employees are on other forms of paid or unpaid leave. 

 

Don't forget, however, that while the FMLA does not require the payment for maintenance of benefits other than group health insurance during the period of leave, once an employee returns from FMLA leave, his/her benefits must resume "in the same manner and at the same levels as provided when the leave began, and are subject to changes in benefit levels that may have taken place during the period of FMLA leave."

 

Note: Opinion letters are intended as private advice from the DOL to the inquiring employer.  They may be used for informational purposes only; they may not be used or cited as precedent.

 

To view opinion letter FMLA2006-3-A, surf to: http://www.dol.gov/esa/whd/opinion/FMLA/2006/2006_01_31_3A_FMLA.pdf.

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