Employer paid insurance premiums

tfevergrn

I am in the process of revising and updating an employee handbook. It hasn't been updated since 1997. One questionable policy I see in the handbook is regarding personal leave of absence and insurance premiums. Employees medical benefits premiums are paid 100% by the company. The policy states that while an employee is on a personal leave of absence the company will continue to pay their insurance premium through the end of the month plus one additional month, at which time the employee will be responsible for paying their premium.

Can you make an employee pay their insurance premium while on a personal LOA if a company typically pays 100%? I know that an employee is responsible for "their portion" of a premium while on any LOA, but in this case the company does not require that an employee share in the premium cost. Can you all of a sudden make it a requirement while on a personal LOA? I have never heard of this before and it must have been lawful at some point.

I can understand why this policy was made as you could have an employee taking what you thought was a valid personal LOA, but is really out looking for another job or possibly working one, where their benefits have not kicked in yet. Without this policy the employee would be working for someone else while using your benefits until their benefits kick in and then quit.

Please let me have your thoughts on this and thank you in advance for your help.

bsa

[u]Personal[/u] LOA is a company granted benefit -- not a federal law like FMLA. As such, the company can set it's own policy regarding insurance premiums using their group health plan policy as a guide. For my company, a personal LOA is a rare thing.

tfevergrn

Do you have to have a Pregnancy Leave Policy? Can you just issue pregnancy leave in accordance with FMLA and any other State Leave laws? If you have a pregnancy leave policy, can you require that the employee, after a certain period of time, pay their insurance premium while on pregnancy leave, even though the employer typical pays 100% of the premium while employed and at work? Any help here would be greatly appreciated.

AnaFL

I agree with bsa on the personal loa. At our company if an employee takes a personal loa not connected to FMLA, they will be covered on our insurance (we pay almost 100%) till the end of that particular month, and if they are gone for longer than 30 consecutive days, Cobra kicks in and they pay the whole premium. The same goes for other benefits such as life insurance, long term disability etc.

If the employee is on a medical loa (fmla) where they are disabled, our policy is that we provide a short term disability for up to 26 weeks (6 months), and fmla would run concurrently with that. During those 26 weeks, our policy states that we still continue to pay the health insurance premiums, and the employee pays their small part, along with their part of other insurance plans, and altho we are still paying for most of it, it is officially cobra from the start of a new month, and if they don't return after the 26 weeks, termination happens automatically, and cobra continues, but the employee would start paying 100% of the cobra rate.

My understanding is that you can set whatever policy you want with regards to this, as long as you apply it consistently across the board. Additionally, whatever policy you do decide on, during the fmla portion of the leave, they must continue to receive the exact same benefits, administered the exact same way as they received before they took the leave, right up until the end of fmla.