An Administrator's Guide to California Private School Law

Chapter 8 – Leaves And Absences

a. How Can Employees On Leave Pay Their Share Of Health Insurance Premiums? If FMLA leave is unpaid, schools have a number of options for obtaining payment from the employee. The school may require that payment be made to the school or to the insurance carrier, but no additional charge may be added to the employee’s premium for administrative expenses. The school may require employees to pay their share of premium payments in any of the following ways:  Payment would be due at the same time as it would be made if by payroll deduction;  Payment would be due on the same schedule as payments are made under COBRA;  Payment would be prepaid pursuant to a cafeteria plan at the employee’s option;  The school’s existing rules for payment by employees on “leave without pay” would be followed provided that such rules do not require prepayment (i.e., prior to commencement of the leave) of the premiums that will become due during a period of FMLA leave or payment of higher premiums than if the employee had continued to work instead of taking leave; or  Another system voluntarily agreed to between the school and employee, which may include prepayment of premiums. 1274 In addition, if the school’s cafeteria plan allows, the employee may pay his or her share of the health-care premiums on a pre-tax basis after returning from leave. b. What Are The Consequences If Employees Fail To Make Timely Health Insurance Premium Payments? In the absence of a school policy providing for a longer grace period, a school’s obligations to maintain health insurance coverage ceases under the FMLA if an employee’s premium payment is more than 30 days late. 1275 In order to drop the coverage, the school must provide written notice to the employee that the payment has not been received. Such notice must be mailed at least 15 days before coverage is to cease, advising the employee that coverage will be dropped on a date at least 15 days from the date of the letter unless payment has been received by that date. 1276 If an employee who had group health coverage before the start of an FMLA leave does not return to work when the FMLA leave ends, this is a qualifying event under COBRA. This is because there is a reduction in hours coupled with a loss of coverage. As a result, COBRA must be offered at the end of the FMLA leave regardless of whether the employee continued health coverage during the FMLA leave.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 293