Employee fails to pay premium while on FMLA leave: When can you drop coverage? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Employee fails to pay premium while on FMLA leave: When can you drop coverage?

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in FMLA Guidelines,Human Resources

Employees who are 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.

But no pay means no insurance. If he skips any payments, the employer can terminate coverage without violating the FMLA.

Recent case: Shelby Lampley sued under the FMLA, saying his employer canceled his health insurance while he was out on FMLA leave.

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

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

Final note: Ordinarily, the em­­ployee’s premium is collected 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 they have to continue the premium payments.

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