When employees are on leave due to work-related injuries, how long are they entitled to stay on our health plan? Are we required to pay for their health benefits while they are out?
We have always just paid for their benefits (both the employer and employee portion of the premiums) with the idea that they will pay us back for both when they return to work. But several employees haven’t returned to work after such as injury, and we were unable to recover the premiums we paid on their behalf.
The answer to your question lies in your state’s worker’s compensation requirements or, if it applies to you, the federal Family and Medical Leave Act (FMLA).
First, let’s assume the FMLA does not apply (either because you have fewer than 50 employees or the employee isn’t eligible for leave) but that the employee qualifies for worker’s compensation benefits. Neither Kansas nor Missouri law requires employers to maintain employees’ health benefits while they are out on workers’ compensation leave. So technically, you could terminate their coverage and offer COBRA. If the employee works in a different state, you will need to consult the workers’ compensation laws of that state.
A less severe approach than terminating employees’ health insurance would be to allow them to keep their coverage while on leave but require them to pay the full amount of premiums (both the employee portion and the employer portion) to maintain benefits. You or your broker would need to confirm with the carrier how long it is willing to let employees keep their coverage in this situation.
However, if an employee’s absence does qualify for FMLA, you would be required to continue paying the employer portion of the premium until the end of the FMLA leave. In this situation, employees are responsible for paying the same amount of the premium as they would pay if they were not on FMLA leave.
If an employee does not return from FMLA leave, you would be entitled to recover the group health premiums you paid during the leave. However, as you have experienced, that may be easier said than done. The legal costs associated in recovering unpaid premiums can be more than the premiums themselves. Still, you might want to consult an attorney to see if you can devise a cost-effective approach.