Who Pays for Health Coverage During COVID-19-Related FMLA Leave?
Question: Several of our company’s employees are taking COVID-19-related emergency childcare leave under the Family and Medical Leave Act (FMLA). We understand this must be paid leave, but do we have to pay for our employees’ health coverage while they’re gone?
Answer: Your company may have to pay its own share of health coverage premiums while employees are on paid FMLA emergency childcare leave. But it doesn’t have to pay the employee’s share.
FFCRA + FMLA
The Families First Coronavirus Response Act (FFCRA) amends the FMLA to require certain employers to provide temporary paid emergency childcare leave from April 1, 2020, through December 31, 2020. The leave generally is available when an employee who has been employed for at least 30 calendar days is unable to work or telework because he or she needs to care for a son or daughter under age 18 while a school or place of childcare is closed, or a childcare provider is unavailable, due to a COVID-19-related emergency declared by a federal, state or local authority.
Employers with fewer than 500 employees must provide this expanded FMLA leave. Those with fewer than 50 employees are exempt if providing the leave would jeopardize the viability of their businesses.
Employers covered by the expanded paid FMLA requirements must maintain group health plan coverage on the same terms as if employees didn’t take the emergency childcare leave and remained continuously employed during the leave period. For instance, if an employee with family coverage takes the paid leave, family coverage must be maintained during the leave.
The same group health plan benefits must be provided to the employee (and covered family members) as before the leave — including coverage for medical, surgical, hospital, dental and vision care, as well as mental health and substance abuse treatment. This also means your company must pay the same share of the premiums for health coverage for an employee on expanded FMLA leave as it would have paid if the employee hadn’t taken leave.
The employer cannot require employees on FMLA leave to pay more for coverage than they would have paid if they had remained actively employed. Likewise, if the employer provides a new health plan or changes health benefits, employees on FMLA leave are entitled to the new or changed plans or benefits to the same extent as if they weren’t on leave.
An employee’s share of premiums must be paid by the method normally used during any paid leave (for example, through a payroll deduction). If the pay provided under the FFCRA is insufficient to cover the employee’s premiums, your company should follow existing conventional FMLA regulations, which prescribe options for obtaining payment.
Note that an employer’s obligation to maintain coverage (and pay its share of premiums) will end for any employees that:
- Choose to drop coverage during the leave,
- Fail to pay their share of the premium by the applicable deadline,
- Don’t return to work at the end of the leave, or
- Inform you that they don’t intend to return from leave.
However, employees (and their family members) who choose not to retain group health plan coverage while taking FMLA leave are entitled, upon returning from leave, to have coverage reinstated on the same terms as before the leave — without any additional qualification requirements or waiting periods.
FMLA leave under the FFCRA has provided some relief for employees struggling to manage childcare during the pandemic, but it continues to represent a compliance challenge for employers. Work with your legal and benefits advisors to ensure you follow the rules.