Many individuals wonder what is going to happen to their employer-sponsored health insurance coverage while they are on a medical leave of absence from work. As with most legal questions, the answer is it depends.
This post addresses some of the initial factors you might consider in order to determine whether your health insurance coverage will continue while you are unable to work.
Your Health Insurance Should Continue If You Are on FMLA Leave
The Family and Medical Leave Act (FMLA) permits workers to take up to 12 weeks of unpaid medical leave in a year for a serious health condition without losing their job. Whether you are eligible for FMLA leave depends on a number of factors, including the number of employees at your company, how long you have worked for the company and whether you have had other medical leaves during the past year. More information about the FMLA can be found here.
If you have health insurance with your employer and take FMLA leave, then the employer must continue your health insurance coverage on the same terms as if you had continued to work. That means, if you had made contributions to the health insurance premiums, you will continue to be obligated to do so. If premiums normally were deducted from your paycheck, but your leave is unpaid, you will have to arrange to pay the employee portion of the premiums in order to maintain coverage.
One note of caution: If you do not return to work at the end of your leave period, or if you inform your employer of your intent not to return, the employer no longer has an obligation to maintain your health insurance benefits. Additionally, the employer may require you to repay the employer’s share of the premium payments if you fail to return to work following leave.
Some Employers Offer Continued Health Insurance While Employees Are Approved For Short or Long Term Disability Insurance Benefits
While not required, some employers offer continued health insurance coverage while a worker is on short or long term disability leave. Short and long term disability benefits do not cover the cost of health insurance premiums. Rather, STD and LTD policies pay a percentage of your income while you are unable to work. In order to determine whether you will have continued health insurance coverage while you are on a short or long term disability leave, you will need to examine the employer’s policies and/or its benefits handbook. An employer is not required to maintain an employee’s health insurance coverage for extended leaves of absence, but it is required to follow its written policies and to apply them consistently.
In Most Cases, You Must Be Permitted to Elect COBRA Continuation Coverage If You Lose Your Health Insurance
Aside from certain small employers, as well as the federal government and church organizations, employers must allow you to elect the Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage if your health insurance coverage is terminated due to your leave of absence from work. Generally, for losses of health insurance due to leaves of absence, you will be entitled to 18 months of continued COBRA coverage.
Assuming the leave will trigger your loss of health insurance, your employer must notify the group health plan within 30 days of the qualifying event. Within 14 days of receiving notice, the group health plan must send you an election notice, informing you of your rights to elect COBRA continuation coverage. You then must be allowed at least 60 days to choose whether or not to elect COBRA coverage.
Despite the availability of COBRA continuation coverage, many individuals do not elect health insurance under COBRA because it can be expensive. That’s because your group health plan legally can require you to pay up to 102 percent of its total cost in premiums.
As described above, there are multiple laws and policies to consider in order to determine whether your health insurance benefits will continue while you are on a medical leave. If you would like to discuss your rights to continued health insurance, please contact Hawks Quindel to arrange a consultation with an employee benefits attorney.
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