Who Pays the Premium?

aevans · March 2002

We are a company in Oregon and an employee who is pregnant wants to turn in her resignation for April 12th due to her pregnancy. Our CEO has been letting employees go as soon as they turn in their resignation and paying them through the time that they say their last day will be. If the employee is being paid through April 12th, do we have to continue her insurance benefits as if she was still employed through April 12th?

Down_the_Middle · March 2002

You don't mention how your benefit plans are structured.... Does the departing employee lose coverage on the last day of work or at the end of the month in which they terminate?????
Unless there is more to this than you've stated, I would say PROBABLY. Paying someone in lieu of their notice is an acknowledgement of their resig notice. If the employee wasn't paid for this time, presumably they work be working thru the notice period. I find it hard to understand why paying the person in lieu of their notice doesn't obligate the employer to consider the person employed thru that date. A stronger argument to abbreviate the employment benefits might be to pay the departing person in a lump-sum and then use the last day worked as their term date. You might need local legal advice to confirm that your state doesn't prohibit this.

aevans · March 2002

The employee is covered until the end of the month in which they terminate. I totally agree with the different points that you made we are just trying to cover every scenario becuase our Interim CEO has not been easy to work with. He already denied her materinty leave, so that and few other things he has done to her is why she is resigning. We just want to make sure she has coverage through April. That is when she is due. We are worried that he is going to try and deny her benefits if she turns in her resignation before April 1st.

njjel · March 2002

I'm curious! How can your CEO "deny" maternity leave? And further, why would he/she want to?

aevans · March 2002

The CEO denied maternity leave because according to FMLA we have less than 50 employees and according to Oregon Family Leave we have less than 25 employees and do not have to give any leave. We aren't sure why he denied her maternity leave, his reason has changed a couple of times. Before he became our Interim CEO, FMLA had been given to an employee.

Jessica · March 2002

We are a small company (also in Oregon) that faced this question recently with an employee who wanted more than 12 weeks between medical and parental leave, and an additional 3 months at part-time because of the medical condition of the new baby. Based on advice from our attorney we did have the right to deny the leave from a strictly legal perspective. It will be a very difficult period for us because we are so small, and have more than one location, but we have decided to tough it out in order to do the right thing. However, the fact that there was an "opening" regardless of how stable our "legal" position was did play in to the decision.

If I were you, I would recommend that an attorney review the decision made by your interim CEO. If his reason isn't a good one, he should be made aware of the potential consequences. Otherwise, I would agree (based on our policies), if the employee would have worked through a date in April, she would be covered through that month. She should also know that if you are too small for COBRA, she will have the option of Oregon State Continuation for medical benefits. She will have to pay the full cost, but at least she would be covered.

Good luck!

Who Pays the Premium?

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