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Health insurance coverage during non-paid leave of absence?

TERESA KIM's Profile

Time to time we have employees who take Non-paid Leave of Absence.

According to our policy, during all Non-paid leave of absence, all other benefits such as health insurance are to be paid by the employee.

However, it's a kind of dilema, since the reason of this kind of leave of absence is mostly related to health: severe illness, hospitalization or maternity.

So it will be when the employee needs the health insurance more than ever.

May I ask what the most common practice in health insurance coverage during non-paid leave of absence of employees? 100% paid by the employee, 100% paid by the employer or 50 and 50?

Thank you in advance for your advises.


Jack Judd
Title: Retired
Company: Retired
(Retired, Retired) |

In the situation above, it seems the employee would be taking leave for their own disability or maybe the leave would be FMLA related. In both of these circumstances, I believe it would be common for the company to continue to provide health insurance benefits under the same financial parameters as experienced before the leave. If an employee takes a leave for other reasons, I think it is common for the employer not to continue coverage for health benefits but I expect that COBRA policies would kick in.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

The problem arises when you have a policy that says X, and then you start making exceptions. Those who aren't excepted now have a bone (and maybe legal) of contention.

This is a discussion that should be had with both your CLO and CTO (or in old parlance, your lawyer and HR person).

Title: Accountant
(Accountant, SELF EMPLOYEED) |

Jack and Wayne, Thank you for your advises.
The FMLA rules says it is applicable for companies with more than 50 employees.
But our company has less than 50 employees.

How about other companies like ours?
Do they adopt the FMLA rule as their policy?
And how about non-FMLA-qualifying cases?

Thank you again.

Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Regardless whether it is legal or not (see my previous post): Exceptions, like salaries paid, are always known.

People talk. People get jealous. Jealousy leads to morale issues, which leads to productivity issues.

BTW, in a prior company we adopted FMLA (for pregnancy; for the women, partially for the one man, but he was a workaholic and didn't want more time, so the issue never was fully resolved).

Would we have done it for other issues, I don't know, it never came up. Based on how we dealt with employees, I'd say yes.

But, like any policy, it needs to be even-handed and administrative judiciously to prevent abuse.

Pete DeWeese
Title: EVP & CFO
Company: Tanknology Inc.
(EVP & CFO, Tanknology Inc.) |

For any unpaid leaves of absence we continue the coverage, but the employee must continue to timely pay their portion of the benefit costs. If the leave exceeds 13 weeks we then terminate the person and they must elect cobra to continue coverage. The key is to have any of these policies in writing and as others have commented to apply the rules consistently.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

Generally it is handled like a cobra payment being mindful of what is required at federal / state level depending on the type of leave coupled with your company policy. Be consistent and monitor demographics so that unintended discriminatory bias isn't practiced and self-correct if necessary. For shorter leaves (as defined by your company policy; e.g. less than 30 to 60 days), you may want to treat as a non-event and have the employee submit their cost share as a direct payment to the company.


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