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Paying for insurance while on disability

by on
in Employee Benefits Program,FMLA Guidelines,Human Resources

Q. We have an employee who is currently on short-term disability (STD) and is approaching long-term disability (LTD). Our company pays 95% of medical insurance premiums and 100% of STD and LTD premiums. The employee is no longer receiving a salary. Does our company have to continue to provide and pay for medical insurance? — K.M., Arizona

A. I need to make a few assumptions here. First, I’ll assume that your organization is big enough to be covered under the FMLA. Second, I’ll assume you’re dealing with an FMLA-eligible employee. Third, I’ll assume you’re dealing with an employee whose absence is caused by an FMLA-eligible “serious health condition.”

Taking my assumptions as true, under the FMLA, if you normally pay a portion of your employee’s health premiums (e.g., 95%), you must continue doing so during the 12-week FMLA leave. Hopefully, before the commencement of the leave, you made an arrangement with the employee to have him pay his 5% portion of the premiums. Unless you have a policy or practice of paying premiums beyond 12 weeks, you have no obligation to do so for this employee. At that point, it is appropriate for most employers to issue a Consolidated Omnibus Budget Reconciliation Act, or COBRA, notice.

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