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Recapturing health insurance premiums following FMLA leave

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in FMLA Guidelines,Human Resources,Office Management,Payroll Management

Recapturing premiums if illness prevents employee from returning after FMLA leave

Q. I have an employee who is taking leave under the FMLA. The company is continuing to pay the same portion of her health insurance premiums that we paid while she was working. She’s having lingering medical problems, as is her newborn child. If she decides not to return, may we recover any of the premiums we paid?

Probably not. Under both the FMLA and the California Family Rights Act, an employer may not recapture premiums paid for maintaining an employee’s group health plan coverage during periods of unpaid leave if the worker fails to return to work because of his or her own serious health condition, the serious health condition of an immediate family member for whom he or she has to care or for other circumstances beyond the worker’s control.

Most likely, if she is incapacitated or her child has serious health problems, her return is “beyond her control.”

Additionally, employers may not recapture premiums paid on behalf of “key” employees under the FMLA who are not restored to their positions when they are ready to return from their leave.

Recapturing premiums if employee just doesn’t want to return after FMLA leave

Q. We have an employee on FMLA leave who has been telling co-workers that she loves staying home with her infant and probably won’t be coming back. We’re paying her health premiums and would like to know whether we can recoup them if she quits to stay home.

A. In that case, you may be able to recoup the premiums. Such a decision clearly is not beyond the worker’s control.

What if an employee returns from FMLA leave and then quits?

Q. What happens when an employee comes back from FMLA leave, then decides to take another job or quit?

A. The FMLA considers an employee to have returned to work for purposes of premium recovery if he or she has been back at work for at least 30 calendar days. Therefore, if an employee resigns after working for that period, the employer will not be able to recover the premiums.

Employers should note that the existing regulations interpreting the FMLA prohibit employers from recapturing premiums for periods of paid leave. If you decide you can legally recapture health insurance premiums, make sure you exclude any paid time off during which you paid the premiums. For example, if the employee was off for the full 12 weeks but took paid leave for four of those weeks, you can recapture only the premiums you paid for the last eight weeks.

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