Are employers required to maintain health insurance benefits for employees who are out on workers' compensation leave?

The answer depends on whether the employee is also eligible for Family and Medical Leave Act (FMLA) leave or other state medical leave, and if not, what the eligibility requirements of the insurance plan are for continued participation.

If the injured employee on workers’ compensation (WC) is also eligible for FMLA leave or other state medical leave that protects health insurance benefits, those protections will run concurrently with the WC leave, and the employee’s health insurance will continue under the same terms as prior to the leave, including premium cost sharing. Employers cannot increase an employee's portion of the premium because the employee is on FMLA leave.

If the employee is not eligible for FMLA leave, then the employer will need to review the eligibility requirements of its health insurance plan. Most plans will require an employee to be “working X hours or more per week,” with no exceptions for leave outside of FMLA leave. If that is the case, being on WC leave will mean the employee is working zero hours, and therefore, is not eligible to participate in the plan on the same terms as prior to the leave. In this case, this is a COBRA event, due to reduction of hours, and COBRA should be offered. If, however, the plan’s eligibility requirements allow for coverage during such leaves of absence, then the employer would follow those guidelines in keeping the employee on the plan and for how long.

Once FMLA leave or other state leaves are exhausted, employers should again reference eligibility requirements under the plan. If the employee is not able to return to work, and is no longer eligible for coverage due to his or her reduction in hours, COBRA should be offered.