When do group health plan benefits terminate for an employee on a non-FMLA leave of absence?

Continuation of group health plan benefits during periods of leave may depend on the type of leave an employee is on. When an employee is on Family and Medical Leave Act (FMLA) leave, a covered employer is required to maintain group health insurance coverage for an employee and his or her family under the same terms and conditions held prior to the leave. However, when an employee is not on FMLA leave, an employer may need to determine if the leave falls under other federal or state leave laws.

Some states have leave laws that provide time off similar to the federal FMLA leave. For example, Wisconsin has its own family and medical leave law that has different eligibility requirements from the federal FMLA. An employee could be eligible for Wisconsin Family and Medical Leave Act leave but not for FMLA leave. When an employee is on Wisconsin FMLA leave, health insurance should continue under the same conditions as for active employees. Employers should review applicable state leave laws to determine obligations to continue benefits during periods of leave.

If an employee is on leave as a reasonable accommodation under the Americans with Disabilities Act (ADA), an employer must continue an employee's health insurance benefits during the leave if it does so for other employees on similar leave. For example, if an employee is permitted to continue health benefits during periods of unpaid, personal leave, an employee on unpaid leave under the ADA should be able to continue health benefits too.

The Pregnancy Discrimination Act (PDA) does not provide leave benefits, but it does require employers to treat employees the same as other temporarily disabled employees with regard to benefits. Therefore, if an employer allows an employee to take leave due to a temporary disability and that employee is permitted to maintain health benefits during that leave, an employee on leave due to pregnancy must also be permitted to maintain health benefits while on leave.

If an employee is not eligible for federal or state leave but is eligible for an employer-provided leave of absence, the continuation of health benefits is based on the language in the benefits plan. An employee may continue health benefits during periods of employer-provided leave as allowed by the insurance plan documents and approved by the health plan insurer. Employers should address in the written plan documents how long an employee can be absent from work on unprotected leave before health benefits will be terminated and ensure these plan rules are followed consistently.

If benefits are not continued, an employee may elect health care continuation under COBRA due to the qualifying event of a reduction in hours.