Employer-Provided Health Coverage During Employee Leaves of Absence
When an employee is on an extended leave of absence, there is often confusion regarding whether and to what extent the employer must continue to provide coverage to the employee under the employer-provided health plan. To determine whether coverage is required, the employer should consider the terms of the plan, COBRA requirements, and whether the leave is covered by FMLA. The Plan Terms. Employer-provided health plans include continuing service requirements for continuing eligibility. For example, it is common for a health plan to require employees to perform an average of at least 30 hours of service per week to be eligible for coverage under the plan. When an employee goes out on a leave of absence, and the employee’s average hours of service typically fall below the minimum coverage requirement, the employee may no longer be eligible for coverage under the plan. FMLA Leave. Suppose an employer is subject to the Family and Med...