Maintaining Benefits Coverage with a Temporary Work Interruption
A common inquiry from employers is how employee benefits and premium contributions function when an employee is on a temporary work interruption. The type of interruption (e.g., maternity or paternity leave, general layoff or leave of absence) determines how long benefits will continue.
Each insurance carrier has their own parameters on how long they allow benefits to continue when an employee is not actively working. Employers should review their contracts to determine the timeframe their carrier(s) will allow benefits to continue. They should also have a documented policy on continuation of benefits for employees who are not actively working. The continuation of benefits policy should indicate what benefits will be covered during the interruption of work, timeframe, and the cost-sharing arrangement. It is important that employees are aware of the policy and that it follows the parameters established by the insurance carrier.
For maternity and paternity leaves, an employee needs to be treated as though they are an active employee, with the same cost-sharing arrangement for the benefits. All benefits can continue, as long as the premium is paid. An employee is not allowed to pick and choose which benefits they want while on a maternity/paternity leave. Should an employee wish to discontinue any of their benefits during the leave, it is suggested that the employee provide a signed document outlining their desire to do so.
For any other leave situation, the continuation of benefits timeframe will differ depending on the insurance carrier. For some carriers, the disability benefits (Short Term Disability and Long Term Disability) would not continue during the leave. Payment of any applicable premiums is required during the period of time benefits are continued.
Any requests for exceptions to the continuation of benefits policy (an extension to the period for an individual on layoff) should be addressed with the insurance carrier.
As your Benefits Consultant we can work with you and the insurance carrier in response to any questions regarding the continuation of benefits while an employee is on leave.