Managing an employee’s leave of absence involves more than approving time away from work. Employers must also navigate important compliance requirements surrounding health plan coverage, premium collection, and employee communication throughout the leave process.
Understanding these responsibilities can help reduce compliance risks while creating a better experience for your employees.
Health Coverage During FMLA Leave
When an eligible employee takes leave under the Family and Medical Leave Act (FMLA), employers are generally required to maintain the employee’s group health plan coverage under the same terms as if they had remained actively employed.
This generally includes medical, dental, vision, and other benefits that are part of the employer’s group health plan. If your organization offers new plan options or conducts open enrollment during an employee’s leave, employees on FMLA must have the same opportunity to make benefit elections as active employees.
Clear Premium Collection Process
Although employers continue contributing their portion of health insurance premiums, employees are generally responsible for paying their normal share during unpaid leave.
Employers may collect employee premium contributions using several methods permitted under FMLA regulations, including:
- Collecting premiums before leave begins
- Accepting payments throughout the leave
- Recovering employee contributions after the employee returns to work
Whichever method your organization chooses, employees should receive clear, written communication before their leave begins.
Missed Payments
If an employee fails to make required premium payments, employers generally may not terminate coverage unless the payment is more than 30 days late and the employer has provided at least 15 days’ written notice advising that coverage will end if payment is not received.
Employee’s Return to Work or Separation
One of the core protections of FMLA is that eligible employees generally must be restored to the same or an equivalent position with equivalent pay, benefits, and working conditions, subject to limited exceptions under the law.
If an employee does not return after exhausting FMLA leave, the loss of coverage may constitute a COBRA qualifying event, requiring the employer or plan administrator to provide timely COBRA election notices, if applicable.
Importance of Leave Administration
Managing FMLA leave requires careful coordination between human resources, payroll, benefits administration, and regulatory compliance. From maintaining health coverage to collecting premiums and managing required notices, even small oversights can create administrative challenges or compliance concerns.
Whether your organization manages leave internally or works with an outside administrator, it’s important to periodically review your leave processes to ensure they’re efficient, compliant, and accessible.
Interested in Leave Administration with Creative Benefits?
At Creative Benefits, we know leave administration can be complex. While many employers successfully manage FMLA internally, others benefit from additional guidance, resources, or outsourced support.
If you’d like to review your current leave administration process, discuss best practices, or explore solutions that can reduce administrative burden and compliance risk, we’re happy to help.
Reach out to your dedicated account manager if you are already a client or contact solutions@creativebenefits.com or 866.306.0200 if you are considering becoming a client.