Q. We have an employee who is out on anof absence. Our company provides health insurance for its employees and their families, and employees pay 20% of the premium. Our employee has not paid his share of the premium. Should we cancel his health insurance? We are very nervous about doing so because the employee has a very serious health condition. — J.B.
A. I am going to give you two answers to your question. First, the legal answer: Federal regulations permit an employer to cancel an employee’s health insurance coverage during anleave for failure to pay the required employee contribution, after a 30-day grace period and after providing the employee 15 days’ written notice of intent to cancel. That assumes that you would not continue the health insurance by reason of any other company policy.
Practically speaking, however, I would recommend that you find a way to maintain the insurance at least during the FMLA leave period. If the insurance is canceled, the employee’s attorney will very likely scrutinize the cancellation, which may result in litigation. Continuing the insurance and trying to recoup the employee contribution at a later date may serve you better. In any event, you should consult legal counsel if you are considering canceling the health insurance!