What arrangements may an employer make for an employee to pay health insurance premiums while on FMLA leave?
An employer continues to make payroll deductions for health insurance for an employee who is on paid status by the employer (accrued sick leave or other paid time off) while the employee is on Family and Medical Leave Act (FMLA) leave.
If the employee is on unpaid leave, FMLA regulation §825.210 provides various arrangements for payment of medical benefits that employers can implement. The employer may require employees to pay their share of premium payments in any of the following ways:
- Payment would be due at the same time as it would be made if by payroll deduction.
- Payment would be due on the same schedule as payments are made under COBRA.
- Payment would be prepaid pursuant to a cafeteria plan at the employee's option.
- The employer's existing rules for payment by employees on leave without pay would be followed, provided that such rules do not require prepayment (i.e., prior to the commencement of the leave) of the premiums that will become due during a period of unpaid FMLA leave or payment of higher premiums than if the employee had continued to work instead of taking leave.
- Another system voluntarily agreed to between the employer and the employee, which may include prepayment of premiums (e.g., through increased payroll deductions when the need for the FMLA leave is foreseeable).
The employer must provide the employee with advance written notice of the terms and conditions under which these payments must be made. The employer may require that payment be made to the employer or to the insurance carrier, but no additional charge may be added to the employee's premium payment for administrative expenses. An employer may not require more of an employee using unpaid FMLA leave than the employer requires of other employees on leave without pay.
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