The Family Medical Leave Act and Benefit Plans: What comes first – the Law or the Employer’s Established Policy?

Matthew P. Chiarello • July 24, 2018

An employer that employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year is subject to the Family Medical Leave Act (“FMLA”). Therefore, often when I am reviewing an employee benefits plan or policy I flag language that states something like: “You may be eligible to continue your coverage pursuant to the FMLA. Contact the company for more information.”  What does this mean?

Group Health Plan

For purposes of the FMLA, a group health plan is generally a plan that provides health care to employees, former employees, or families of such employees or former employees. This includes, for example: a medical or health insurance plan (including a self-insured plan); dental plan; vision plan; prescription drug plan; health flexible spending arrangement; and an employee assistance plan that provides medical care.

For a group health plan, this is a relatively straight forward analysis. Assuming the employer is subject to the FMLA, the employer is required to maintain coverage under any group health plan for the duration of the FMLA leave on the same conditions that coverage would have been provided if the employee had been continuously employed for the entire FMLA leave.

Non-Group Health Plans

However, for a plan that is not a group health plan, the analysis is different. Generally the employer may not have to maintain the coverage for a non-group health plan for the duration of the FMLA leave, unless the employer’s established policy is to provide coverage for other forms of leave, whether paid or unpaid.  For example, if an employer allows employees to continue their disability insurance while on sabbatical leave, the employer would be required to do the same for employees on FMLA leave.

This means for other plans that do not qualify as group health plans under the FMLA (e.g., life insurance, AD&D, disability insurance, and DCAP), the employer may not have to automatically maintain the coverage while an employee is on FMLA leave. Therefore an employer may want to consider reviewing their non-group health plans to either determine or establish their leave policy.  This way if an employee takes FMLA leave, the employer can adequately communicate exactly what benefits the employee is entitled to during his or her leave.

Employee burnout: what it is and how to prevent it

By Mardy Gould • May 24, 2024
Employee burnout has become an epidemic in today’s modern workplace. So much so that the World Health Organization (WHO) officially recognizes it as an “occupational phenomenon.”1 While many used to consider mounting workplace stress an individual employee problem, these days, it’s become an employer’s responsibility to prevent burnout before it hurts productivity and business performance—not to mention your employees’ physical and mental health. Luckily, you can prevent burnout from affecting your workforce in several ways. This article will explore the causes and signs of employee burnout and the steps you can take to create a positive work environment where employees feel safe from toxic stress levels.

Form 720 and PCORI fee FAQs

By Mardy Gould • May 23, 2024
If you're a small business owner, you may have heard of the acronym PCORI and the fees that come with it. But what is PCORI, and how does it apply to your organization? Under the Affordable Care Act (ACA), sponsors of self-insured health plans must pay a fee to fund the federal Patient-Centered Outcomes Research Institute (PCORI). PCORI is an independent organization the ACA created to conduct research to help healthcare consumers make better decisions for their specific needs and outcomes. It also performs research related to clinical effectiveness. Employers offering a self-insured medical reimbursement health plan, such as a health reimbursement arrangement (HRA), must pay this fee by July 31 each year via Form 7201. This fee was initially set to expire in 2019, but Congress extended it through September 30, 20292, due to the Further Consolidated Appropriations Act of 20203.
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