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Use payroll deduction to collect unpaid premiums

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in Compensation and Benefits,Employee Benefits Program,FMLA Guidelines,Human Resources

Q. An employee went on FMLA leave, but we failed to specify the method in which he would pay his share of health insurance premiums. It’s now three months later, the employee has returned to work and he hasn’t paid a dime. We want to collect the premium. What can we do?—D.T., Texas

A. When employees go on FMLA leave, they’re entitled to continued participation in your group health insurance plan under the same terms that existed immediately before they left on leave. That means, for example, that if the employee normally pays 20 percent of his health care premiums, he must continue to do so while on FMLA leave.

Your predicament highlights the importance of specifying a payment method in advance of the FMLA leave. In your case, we suggest treating the employee’s unpaid contributions like any other debt to the company. Request that the employee sign a form authorizing you to make deductions from his payroll until he satisfies the debt.

Laws regarding payroll-deduction authorizations vary from state to state. But most states allow such deductions as long as they don’t cause the employee to earn less than minimum wage.

Bottom line: If your employee ultimately refuses or fails to repay the contributions, it’s time to drop the hammer! 

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