If you have fewer than 500 employees and provide health insurance, you need to read this post. This impacts even those small employers who are not otherwise subject to the FMLA. These new changes apply to all employers with fewer than 500 employees. This means even those companies that have fewer than 50 employees must comply with these new provisions (but are still exempt from complying with the rest of the FMLA). This article only discusses the impact on group health plans.
While the law does make some changes to health insurance (as referenced in our previous post), the portions of the law on the FMLA and the emergency paid sick leave don’t directly make any changes to the requirements surrounding health insurance during FMLA. However, now that additional people are eligible for FMLA leave more people will be able to continue their health insurance coverage under the FMLA provision.
The FMLA requires employers to continue an employee’s group health plan coverage during the period of the FMLA leave. During FMLA leave, the employee cannot be charged more than the active employee premium for coverage. The coverage provided is active employee coverage and not COBRA. Therefore, if you were unsure of whether your employees who were not at work for COVID-19 related reasons could continue their group health coverage (and by the number of calls we have received in the past few days many of you had that question), the question has now been answered for you. During the period of time that an employee now has protected FMLA leave, they must be able to continue their health plan coverage. It is unclear at this time whether this health care continuation right will apply to those private employers with fewer than 50 employees since this is an existing right under FMLA and small employers are only subject to the new provisions. We hope the regulations clarify this point.
Further since this form of FMLA is a paid leave, the employee likely does not have a mid-year change event to drop coverage even if they would like to do so. Therefore, premiums will need to continue to come out of their pay while they are on paid leave.
All group health plans, whether fully-insured or self-insured, should already contain a provision that provides that an employee’s coverage continues while the employee is on FMLA leave. Your SPD may have general language in it or it may list the reasons for FMLA. If it lists the reasons out to an individual that qualifies for FMLA leave, you need to consider whether a summary of material modifications is necessary for your plan. You have time to worry about whether you need to change your health plan documents though so that doesn’t need to be a priority, but you should make sure that you are properly implementing this change and communicating it to impacted employees.
The DOL was instructed to issue guidance on these FMLA changes within 15 days and we will continue to update our blog as guidance comes out.
Please contact your HORAN representative with questions.