Health Benefits During a Leave of Absence

Written by: John Mammenga

When an employee is out of work, regardless of the reason, the employer needs to be aware of their continuing eligibility for health coverage. This means communicating with your insurance carrier or plan administrator to assist you in following the proper terms and eligibility requirements. No matter who your healthcare provider is, eligibility for benefits can be affected by an extended leave of any kind.

Communicate early and often with your provider or the result could be a loss of eligibility for someone that is out on a company approved Leave of Absence (LOA). This loss of eligibility and resulting loss of coverage can be a very unwelcome surprise to both the employer and the employee.

For example, employees covered through the AE Trust must be working or on paid time off to remain eligible for coverage. Coverage will end the last day of the month that the employee is not working the minimum hours required by your company. Members with coverage through the AE Trust have access to our Trust team to assist you in determining the employee’s eligibility to remain on the plan or options if the employee is no longer eligible.

Therefore, the AE Trust allows members the option of adopting a Leave of Absence (LOA) policy that can extend an employee’s eligibility for coverage for up to 90 consecutive days (3 months) in any 12-month period. To adopt an LOA policy that will extend eligibility in these cases members are required to furnish the AE Trust with a copy of the policy.

To summarize: first, check company policies regarding paid time off, unpaid leave of absence, ADA, Montana Maternity Leave Act, and depending on your size, possibly the FMLA. Once you have navigated all these laws and clarified company policies, then you will need to address the issue of the employee’s eligibility for benefits. Finally, if needed create a LOA policy that will allow employees to maintain eligibility that the company desires and then share that LOA policy with your provider.

Employers with 50 or more employees within a 75-mile radius are required to follow FMLA and the employee’s coverage is protected during the FMLA leave. At the end of leave under FMLA or other LOA policy, if the employee does not return and resume working the minimum hours required by company, the employee’s coverage is termed at the end of the month. Once an employee’s coverage has been termed, employers with a minimum of 20
employees will need to initiate COBRA.

For those members not on the AE Trust, many of the same requirements exist as far as following your leave policies, COBRA, and FMLA. It is important to check the eligibility requirements of your health insurance or health coverage to ensure that you are in compliance.