Not a Member? Get access to HR news and resources that you can trust.
Standing desks and other innovative workstations can help counterbalance the negative health effects of sitting.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Get the HR education you need without travel expenses or time out of the office.
Elevate Your Talent Strategy. Join us in Chicago, IL – April 24-26, 2017.
An employer must pay the cafeteria plan allotment for an employee taking time off under the Family and Medical Leave Act (FMLA), according to a Department of Labor (DOL) opinion letter released Feb. 21.
A city offered its employees a cafeteria plan, allocating to each employee $452.08 per month to pay the premium for one of the city’s group health plans. The balance could be used, at the worker’s option, to provide dental/disability/life insurance or compensation.
Cafeteria plans let participants pay health insurance premiums on a pre-tax basis. Most small businesses are, however, unable to meet the nondiscrimination cafeteria plan rules due to their size.
The city did not provide the cafeteria plan allotment for workers on unpaid FMLA leave, until a union challenged this policy and the city wrote the DOL for an opinion. The city asked whether the FMLA requires it to continue cafeteria plan health payments for an employee on unpaid FMLA leave if city policy requires all employees on unpaid leave of any kind to make their own group health coverage payments.
The city maintained that if it paid the cafeteria plan allotment for an employee on unpaid FMLA leave, it would be discriminating against employees on other types of unpaid leave whose cafeteria plan allotments are not paid. Regardless, the DOL said the cafeteria plan allotment had to be paid during FMLA leave.
The FMLA and its regulations require maintenance on the same conditions of any group health coverage, regardless of whether it is provided through a flexible spending account or other component of a cafeteria plan, the DOL stated. As a result, the DOL concluded that “employees taking unpaid FMLA leave must have that portion of their cafeteria plan allotment allocated to group health insurance (including dental) premiums paid by the city in the same amount as paid prior to the start of FMLA leave.”
The city could not recover the cafeteria plan payments for periods of FMLA leave, the DOL added (FLSA 2006-3-A).
It reminded the city that its opinion letter is based exclusively on the facts and circumstances the city described. Existence of any other factual or historical background not contained in the city’s letter might require a different conclusion, the DOL cautioned.
Allen Smith, J.D., is senior legal editor for HR News.
FMLA and Other Leave Toolkit
Benefits Design, SHRM White Paper, June 2002.
Internal Revenue Service final rule on the effect of the FMLA on cafeteria plans, Federal Register, Oct. 17, 2001.
For the latest HR-related business and government news, go daily to www.shrm.org/hrnews
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies