Human Resources, Small Business Spoonfuls Podcast

SBS 231: FMLA: When Employee Health Insurance Premiums Are Over Due

Hey Compliance Warriors!

Today we discuss a user question about an employee who’s health insurance premiums are overdue and how to handle this in regard to giving enough notice when canceling their coverage.

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Enjoy and until next time, Be Audit Secure!




Lisa:  Welcome to another edition of small business Spoonfuls I’m Lisa Smith


Mason: I’m Mason Merrell


Lisa: And today we are talking about another FMLA issue. I know we do a lot of FMLA conversation, but it is probably one of the number one or number two topic we get on our questions.


Mason: Yeah, that’s right. And this is from a user actually. And the question today is we have an employee who has been out on maternity leave for two months. She did not qualify for FMLA. It was exhausting her 12 weeks for other circumstances. She will again be eligible for FMLA in two weeks.


Lisa:  Okay. So she’s already been out for eight weeks. Let’s remember that. And the, member goes on to say she has not paid her portion of benefits. So, she’s got about two months’ worth of health insurance benefits that the employer has been covering for her.


Mason: Yeah, that’s a big bit of information in this story.


Lisa:  Yeah. And so, the ultimate question, she gave us a lot of detail, but the ultimate question turns out to be, do I need to give notice before canceling all her benefits? or just notice before canceling her medical? And then how long is the notice and so forth. And that she has called in a few times and said she would be making payments on this, but she is aware of this, but she hasn’t made any payments. And then the other question was, should I send this employee FMLA paperwork or can we just say you’ve had enough?


Mason: Yeah, so first off, we want to say this is good. This person’s trying to be accommodating and, all of that kind of thing. So she’s asking these questions to try to accommodate this person in the best way. Knowing she hasn’t made her payments though at the same time.


Lisa:  Exactly. She really is looking out for the best interest of the worker here. But she’s also trying to be balanced, which is what we have to do in HR is we have to run that line between taking care of workers and supporting the company and making sure everyone is legally on track.


Mason: Yeah. So, first off here, do I need to give notice before canceling all benefits or just notice that the medical?


Lisa:  Well, FMLA says you have to give people 15 days’ notice that you’re going to cancel after they are 30 days delinquent. So, basically there’s that 45 window before they would drop. So yeah, she’s more than 30 days delinquent now. So, give her 15 days’ notice and then if she doesn’t, you know, get them in there and take care of business, then cancel them. Absolutely. Now FMLA says you’re only required to provide this notice and all of this on the health plan. So, you could drop the other coverage like Aflac and all that, she has all this extenuating coverage that’s not part of the health plan. You could drop that immediately. You do not have to keep paying that for her. That 15 days’ notice definitely on the health plan. Now if you want to apply that 15 days to the whole picture, that would probably be a kind thing to do. It’s just not in the law that you’re required to. So, now the other thing I suggested too in this is that you do this via certified return receipt letter. Mail. So, don’t just email her, don’t call her, don’t text her, don’t just write her plain mail. Make sure you get a signature showing she received that letter.


Mason: We preach about records all the time. You can put that right in your file. And if there’s ever an issue that comes up in court, say, well, I did it. Here you go. So you have it for your records. That’s a great suggestion. Okay, So the next part of the question is should I send this employee FMLA paperwork since you will be eligible again soon?


Lisa:  And that’s really the question of does she get more leave Like how does this work Cause she just had eight weeks off and then prior to this she did have 12 weeks in this last year. So, she is coming up now again on more eligibility. And so, the FMLA says yes, you have got to give that to her. So, it’s going to be coming up. You’ve got to let her know that she has 12 more weeks of unpaid leave coming up. But again, you want to put this in writing and you want to give her a deadline that if she does not respond to you by X date, then you don’t have to give her the FMLA if she doesn’t play by the rules. So, you have to give her 15 days.


Lisa:  Right. So you give her the notice. You say you have to respond back within 15 days. Tell me if you’re going to return to work or if you’re going to move forward with more leave. You know, my question is she’s already had eight weeks off. It’s two more weeks until FMLA kicks in. So that’s going to be 10 weeks. She’s had a lot of no pay. Some of it was paid, but most of it wasn’t. And then now she’s got 12 more weeks ahead of her with no pay. But you have to hold her job. So can she even afford to do that And when you cut her health insurance, if she doesn’t pony up the money, then she may decide she doesn’t want to return to work. And if she has no intent, if she writes you back and gives you something you can prove, whether it’s an email or a letter and says, actually I’m not going to come back to work, then her FMLA rights are all shattered.


Mason: Yeah. And at that point, would it be appropriate to terminate?


Lisa: Absolutely.


Lisa:  You didn’t feel like you could hold her job any farther


Mason: Well, I just want to say good on you user because you’re doing everything you can in this case. Maybe this employee is very valuable to you in this situation, but you’re doing everything you can in what could be a frustrating situation for employers. That’s good. Just one thing to note here as you brought out, phone calls are probably not productive in cases like this because it’s really hard to prove verbal.


Lisa: Right Oh yeah, absolutely. You’ve got to have it where you can prove that she gave you this information.


Mason: Yep. So written notice on a lot of this stuff is just perfect to have for your records and their records and everything.


Lisa:  And when you send it returned receipt, they have to sign for it. So, you have a signature showing it was received.


Mason: That’s right. And everything’s very public in these situations so you can see it. Okay, great. So, that’s just a quick one that really kind of could apply to a lot of situations. Not just this one specifically, but this 15 days’ notice, have everything in writing, retain records. All of the above. Okay, great, so I think that wraps this up.


Lisa: Yeah, so until next time, I’m Lisa Smith


Mason:  I’m Mason Merrell

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