Health Insurance Extended Leave

Individual or Family Health
Group Health Coverage

Health Insurance and Extended Leave

If you have to take a leave of absence from work due to extend illness, you may be concerned about how long your health insurance will remain in effect to cover your treatments. This is a very good question, and one that does not have a simple answer.

Take the case of a woman who had been working full-time and had full company paid health insurance benefits from the firm for which she worked.  She had to take an extended leave due to illness. She had been working for the firm for almost 20 years and had accumulated more than 100 days in paid sick leave.  She had been out of work for over 12 weeks when she received some distressing news. Her firm’s health insurance coordinator had said under the Family and Medical Leave Act the employee had only been entitled to 12 weeks of leave. After that point she was no longer considered an employee and had to pay for her own benefits through COBRA. The benefits coordinator asked that she reimburse the company for the premiums her employer had paid ever since the past the 12-week point. But her somewhat more compassionate HR Director begged to differ with the health insurance coordinator. She felt that since the employee had not used up her accumulated paid sick leave she was still an employee. And the 12-week proviso under the Family Leave Act should not kick in until all paid sick leave was exhausted.

Who is right under this set of circumstances?  According to most legal experts the HR Director is correct. This woman remains an employee of her company because she has not used up her accumulated sick time. As such she should not have to take on the full cost of her health insurance premium as an ex employee would. Under most employer based group health insurance plans, paid time off is indistinguishable from worked time and should not trigger the end of health insurance benefits. However a definitive answer can only be found within the fine print of the company’s particular health insurance plan.

It is true that the Family and Medical Leave Act provides eligible employees up to 12 weeks of unpaid leave a year for various reasons. These include caring for a newborn, spouse, parent or a child with serious health condition, or to treat their own serious illness. But what probably caused the confusion in the illustration above; a company can require employees with accrued sick leave to use it at the same time they are out on a FMLA leave. So that makes at least part of the leave essentially a paid one. But that also cuts into employees' bank of sick days.

Regardless if it is being run concurrent with paid sick leave or not, while employees are on an approved FMLA leave, their employers are required to keep their health insurance exactly as it was before the leave.

COBRA benefits allow an employee that leaves a job under certain circumstances to keep access to their employer based group health insurance, but they are required to pay the full premium for that coverage. Often people are not aware of just what a benefit their health insurance is, until they have to pay for the whole premium themselves through COBRA. Generally, an employer can impose COBRA only after the employee exhausts all paid time off and or unpaid leave through FMLA