Worker's Compensation and health benefits

Yeseniayf

Is it O.K./legal to terminate an employee's insurance coverage if they are off work due to an industrial injury? I was told we can terminate their coverage right away and offer them COBRA. Is this true?

I am in California.

mwild31

You should really speak with your Claims Administrator right away before you make the decision. There can be legal ramifications as well as how it will affect the payments made to the employee and consequently, your company in the form of higher premiums due to any time loss issues.

ESBVNR (Erogonomics Should Be Voluntary Not Regulated)

LindaS

If there injury qualifies them for FMLA (and the employee is eligible), and if your policy states that FMLA and W/C run concurrently, you cannot terminate them from the group health plan until the FMLA is exhausted. If these do not apply, you can terminate them and offer them COBRA.

Eliant

The safest way to handle this situation is:
Place them on FMLA, and once that has experied, notify with COBRA. You can't go wrong.

Eliant

Yeseniayf

I agree. That's what I have been doing so far, but we had a consultant tell us that we can terminate the benefits on the first day the person is out. I think that's playing with fire and need to show some proof to my employer that if we do that, we might or will be in trouble in the future.

I am looking into ERISA further and think that is going to give me the back up I need to show my employer.

Thank you for your opinion.

skyrocket

Last year the WCAB in California issued a ruling permitting employers with ERISA plans to terminate employees from the group health plan without fear of being considered as having "retaliated" against the employee.

But in order to do so, you must have a policy IN WRITING which describes the time period that you will continued coverage under the group health plan. This policy must also be made available to employees (i.e in Handbook, separate mailing, posted, etc.) If you have more than 50 employees, you cannot make the benefit coverage period less than the 12 weeks provided by FMLA. Work Comp absences can be considered FMLA absences.

We recommend that employers with 50+ employees establish a 12 week policy for Work Comp absences regardless of whether or not the employee has used any FMLA time. To try to juggle a written policy that discusses reducing the 12-weeks of benefit continuation for Work Comp by any time used for non-workcomp FMLA gets too confusing. You can certainly allow more time than 12 weeks.

If you have less than 50 employees, you are free to set any time period you desire - but I still advise such employers to give a reasonable time period.