- Learn about employee protections of health plan coverage during paid sick or family leave used during the COVID-19 pandemic.
- Find out about protections provided to employees if health plan changes occur during paid leave.
- Learn about employees’ responsibilities for health plan payments if plans change during paid leave.
- Learn about employee eligibility for health plan reinstatement if they choose to terminate coverage during paid leave.
The U.S. Department of Labor recently issued temporary regulations implementing the emergency paid sick and family leave provided under the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Fiducial has some highlights of the regs’ impact on group health plans. Visit Fiducial’s Coronavirus Update Center for more information on COVID-19 Paid Sick and Family Leave as well as emergency relief services.
Maintenance of coverage during paid sick or family leave
Many employees are taking paid sick or family leave during the current pandemic, and Congress is acting to protect them. To that end, employers must maintain group health plan coverage on the same terms as if an employee didn’t take paid sick or family leave and remained employed during the leave period. For instance, if an employee with family coverage takes this paid leave, family coverage must continue during the leave.
Additionally, the employee (and covered family members) must receive the same group health plan benefits as before the leave. This includes medical, surgical, hospital, dental, eye care, and mental health and substance abuse coverage. These requirements also apply to benefits provided through a supplement to a group health plan. Supplement plans include health Flexible Spending Accounts or other cafeteria plan components.
Plan changes during paid sick or family leave
If an employer provides a new health plan or benefits (including a new benefit package option) while an employee is on paid sick or family leave, the employee is entitled to the new or changed plan or benefits to the same extent as if he or she wasn’t on leave. This also applies if an employer changes health benefits or plans during an employee’s leave.
Other plan changes (for example, to premiums or deductibles) applicable to all employees also apply to employees taking leave. Employees on leave must be notified of the opportunity to change benefits or plans.
Payment of premiums
Employees participating in a group health plan who take paid sick or family leave must pay the same portion of the premium as before the leave. The employee must pay the adjusted employee premium amount on the same terms as other employees if premiums are adjusted. The employee’s share of premiums must be paid by the method normally used during any paid leave (for instance, through a payroll deduction).
For unpaid leave, or if the pay provided by the FFCRA doesn’t cover the employee’s premiums, the regulations direct employers to existing regulations under the Family and Medical Leave Act. These prescribe options employers may use to obtain payment.
Reinstatement or termination
Employees (and their family members) who choose not to retain group health plan coverage while taking paid sick or family leave qualify, on their return, to have coverage reinstated on the same terms as before the leave. This must occur without any additional requirements (for instance, without waiting periods).
Except as required by COBRA, an employer’s obligation to maintain health benefits during paid leave ends when the employment relationship would have terminated if the employee hadn’t taken the leave. For example, if employment ended because the employee fails to return from leave or the employer closes.
The temporary regs are effective through December 31, 2020. Fiducial can provide further details and answer any questions you have. Call us at 1-866-FIDUCIAL or make an appointment at one of our office locations for more information. For more small business COVID-19 resources, visit Fiducial’s Coronavirus Update Center to find information on SBA loans, tax updates, the Paycheck Protection Program, paid sick and family leave, and more. Ready to book an appointment now? Click here. Know someone who might need our services? We love referrals!