Compliance Steps

Step 8: Review Employer's Obligation to Provide Benefits During Leave

During any FMLA or CFRA leave, you must maintain the group health plan coverage for the employee and the employee's dependents on the same conditions as coverage would have been provided if the employee had been continuously employed during the entire leave period.

A "group health plan" is any plan of, or contributed to by, an employer (including a self insured plan) to provide health care (directly or otherwise) to the employer's employees, former employees, or the families of such employees or former employees."⁷ Medical, surgical, hospital, dental and/or eye care, mental health counseling, substance abuse treatment benefits, etc., must be maintained during leave if provided in the employer's group health plan. This includes any existing supplemental benefits to a group health plan, whether or not provided through a flexible spending account or other part of a cafeteria plan.

While an employee is on FMLA or CFRA leave, you also should maintain non-health benefits as well as group health plan benefits. Typical "non-health" benefits include: life insurance, long or short term disability insurance, accidental death insurance, etc. It is important to maintain non-health benefits even though FMLA does not specifically require this, because FMLA and CFRA do require an employer to restore the employee to benefits and coverage (not limited to group health plan coverage) equivalent to what the employee would have had if the leave had not been taken. This may not be possible if coverage lapses on a benefit plan due to the employee's failure to pay premiums during FMLA or CFRA leave. Consequently, most employers will choose to maintain the non-health benefits during a FMLA or CFRA leave to avoid this possibility, and related liability.

PDL does not require continuation of group health plan and non-health benefits - if an employee is not FMLA-eligible there is no mandate for you to continue to pay for these benefits as if the employee was still working. You should offer the employee the opportunity to continue coverage by deducting the full amount of the group health plan premiums and non-health plan premiums during any paid portion of the PDL leave and arrange one of the suggested payment methods for the unpaid portion of the leave (see Step 9). However, PDL requires the employee to be restored to benefits and coverage (not limited to group health plan coverage) equivalent to what the employee would have had if the leave had not been taken upon return to work - so it may be prudent for you to continue to pay premiums and any employee copayments if the employee is unable to do so or defaults during the unpaid portion of the leave.

In short, you may need to make premium payments that the employee fails to make during the FMLA, CFRA or PDL leave in order to ensure full eligibility for all types of group health plan and other non-health insurance benefits upon his or her return.

After reviewing these obligations, proceed to Step 9.

7. The term "group health plan" does not include certain insurance programs providing health coverage under which employees purchase individual policies from insurers. These plans receive no contributions made by the employer, are completely voluntary for employees, and are almost exclusively administered by the insurance company, not the employer. If you are uncertain whether your plan qualifies as a "group health plan" or is a voluntary employee pay-all insurance plan, contact experienced employment counsel.