The Department of Labor issued temporary regulations describing the requirements for group health plan coverage of employees who take leave under the Emergency Paid Sick Leave Act (EPSLA) or Expanded Family and Medical Leave Act (EFMLA). These acts are separate subparts under the Families First Coronavirus Response Act (FFCRA). (See Families First Coronavirus Response Act Legislative Alert #1.) The leave is set to expire on Dec. 31, 2020.
Same Coverage Required During EPSLA and EFMLA Paid Leave Periods.
The temporary regulations state that an employee who takes paid leave under the EPSLA or EFMLA is entitled to continued coverage under the employer’s group health plan and on the same terms as if the employee did not take the paid leave. However, these provisions do not apply to coverage under individual health insurance policies purchased by the employee from an insurance provider.
Employees Entitled to Same and New Benefits During Paid Leave Periods Under the EPSLA and EFMLA.
While the employee is on paid leave under the EPSLA or EFMLA, the employer must maintain the same group health plan benefits to the employee and eligible family members covered under the plan before taking the paid leave.
This requirement also applies to benefits offered as a supplement to a group health plan such as a flexible spending account or other component of a cafeteria plan. Benefits that must remain the same include, but are not limited to, medical care, surgical care, hospital care, dental care, vision care, mental health counseling, and substance abuse treatment.
In addition, if the employer provides a new health plan or benefit package option under a current plan, or new or additional benefits while the employee is taking paid leave, the employee is entitled to the new plan/benefits as if the employee was not on leave. The employer must give written notice of the opportunity to enroll in the new plan or for the new benefits to the employee on paid leave, and if requested, the employee must be allowed to enroll in the new plan or receive the new benefits.
Employers Must Keep Same Premium Payment Arrangements During the Period of Paid Leave Under the EPSLA and EFMLA.
Employees receiving group health plan coverage who take paid leave will remain responsible for paying the same portion of the premium for coverage as paid before the paid leave.
If premiums are adjusted, the employee will be required to pay the same employee premium portion on the same terms as other employees.
The method of payment of the employee’s premium contribution shall be that same normally used during any paid leave, such as by payroll deduction.
Employees Who Don’t Retain Coverage During the Period of Paid Leave Under the EPSLA and EFMLA are Entitled to Reinstatement.
Employees who chose not to remain covered under the group health plan while on paid leave under the EPSLA or EFMLA are entitled to be reinstated for coverage under the same terms as existed prior to taking the paid leave, including coverage for family members.
Termination of Employment During the EPSLA and EFMLEA Paid Leave Periods.
Except as required under applicable COBRA rules, an employer’s obligation to provide health insurance coverage while an employee is on EPSLA or EFMLA terminates when the employment relationship would have ended had the employee not taken paid leave (such as the employee’s failure to return from paid leave or closure of the employer’s business).
Please contact a member of the team of Woods Rogers Tax and Employee Benefits attorneys if you have questions and concerns about the provisions of these temporary regulations.