Benefits-Related Provisions in the Final FMLA Regulations

Regarding the recently issued final FMLA Regulations issued by the DOL yesterday, here are the benefits-related sections of the regulations: 825.209 Maintenance of employee benefits. 825.210 Employee payment of group health benefit premiums. 825.211 Maintenance of benefits under multi-employer health…

Regarding the recently issued final FMLA Regulations issued by the DOL yesterday, here are the benefits-related sections of the regulations:

825.209 Maintenance of employee benefits.
825.210 Employee payment of group health benefit premiums.
825.211 Maintenance of benefits under multi-employer health plans.
825.212 Employee failure to pay health plan premium payments.
825.213 Employer recovery of benefit costs.

Besides these provisions, the final regulations also:

(1) Provide guidance regarding when PEOs will be considered joint employers for purposes of FMLA.

(2) Allow the employer and employee to agree to run paid leave concurrently with FMLA leave to supplement disability benefits.

(3) Allow an employer to deny an employee the payment of a bonus or other payment based on achievement of a specified job-related performance goal (such as attendance) where the employee has not met the goal due to being on FMLA leave, so long as this is done in a nondiscriminatory manner.

These final regulations have an effective date of January 16, 2009. For those employers who haven’t updated their benefits booklets or plan documents to reflect these new rules, it is time to do so.

Also, here is what the DOL has to say in the preamble as to what, if any changes, were made to the benefits-related provisions in these final regulations:

Section 825.209 (Maintenance of Employee Benefits) No changes were proposed to this section. The Department received no comments on this section and the final rule adopts this section as proposed.

Section 825.210 (Employee Payment of Group Health Benefit Premiums) Section 825.210 addresses an employee’s obligation to pay his or her share of group health plan premiums while on FMLA leave. The Department proposed to revise paragraph (f) of this section by deleting the word ‘‘unpaid,’’ because an individual who is simultaneously taking FMLA leave and receiving payments as a result of a workers’ compensation injury is not on unpaid leave. See § 825.207(e). In addition, the Department proposed to make several technical corrections by changing the cross-references at the end of § 825.210(d) and (f) to reflect the renumbering of other sections dealing with employer notice and workers’ compensation. The internal crossreference at the end of § 825.210(f) was deleted as unnecessary. The Department received no comments on this section and the final rule adopts the section as proposed.

Section 825.211 (Maintenance of Benefits Under Multi-Employer Health Plans) No changes were proposed to this section. The Department received no comments on this section and the final rule adopts this section as proposed.

Section 825.212 (Employee Failure To Make Health Premium Payments) Section 825.212 explains that an employer may terminate an employee’s health insurance coverage while the employee is on FMLA leave if the employee fails to pay the employee’s share of the premiums, the grace period has expired, and the employer provides sufficient and timely notice to the employee. The Department proposed to add language to paragraph (c) of this section to make clear that if an employer allows an employee’s health insurance to lapse due to the employee’s failure to pay his or her share of the premium as set forth in the regulations, the employer still has a duty to reinstate the employee’s health insurance when the employee returns to work, and the employer may be liable for harm suffered by the employee as a result of the violation if it fails to do so. This proposal is a clarification and does not represent a change in the Department’s enforcement position. Few comments were received on this section. The American Association of University Women supported the clarification, which they termed ‘‘common sense.’’ The Chamber requested that language be added to clarify that employers will not be held liable for medical costs incurred during a lapse in coverage prior to the employee’s return to work, while the National Retail Federation expressed concern regarding the employer’s ability to recoup the cost of maintaining the employee’s insurance coverage. The Department believes that the proposed addition is clear in stating that employers may only be held liable for their failure to restore an employee’s health insurance upon the employee’s return from FMLA leave. As explained in the NPRM, employers have a variety of alternatives to terminating an employee’s health insurance when the employee fails to make premium payments, such as payroll deductions or other deductions after the employee returns to work, to the extent recovery is allowed under applicable laws, or as set forth in revised § 825.213 below. Accordingly, the final rule adopts § 825.212 as proposed.

Section 825.213 (Employer Recovery of Benefit Costs) This section explains what process an employer may follow to recoup insurance premiums from an employee when the employee does not return from leave in certain circumstances. The Department proposed to move language from current § 825.310(h) to this section, in order to combine it with other issues involving repayment of health premiums. This language provides that where an employer requires medical certification that an employee’s failure to return to work was due to the continuation, recurrence, or onset of a serious health condition, so that the employee does not have to repay the employer for health insurance premiums paid during FMLA leave, the employee must bear the cost of any such certification, and associated travel costs. The Department received no comments on this section and adopts § 825.213 as proposed.

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