Health Insurance: Can You Mandate Full Premium Payments?

(Post by Rick Dacri, July 22, 2013)

This question came through my HR HelpLine.

 Client HR HelpLine Question: We currently pay the entire premium for each employee that is enrolled in our group health insurance plan. We recently had an issue arise when an employee had discussed with us that he might have elective surgery on his foot and would be out of work for an extended period of time. The employee decided against the surgery at this time, but it brought up an issue that we hadn’t previously considered. Can we put an addendum in our employee handbook that states that if an employee has elective surgery not related to any work-related injury and will be out of work for an extended period of time (say several weeks) that the employee is responsible for their health insurance premiums while not working? Also, if an employee takes a leave of absence can we do the same? What is the best way to handle this?

Expert Advice: Since you are an employer with 25 employees the federal Family and Medical leave Act is not applicable. That law would have mandated that you continue to provide coverage for the employee for up to 12 weeks at his normal contribution. You do, however, fall under Maine’s Family and Medical Leave Act. This law applies to private sector employers with 15 or more employees at a single location within the state and covers employees who have worked for you for more than 12 consecutive months. In this case, he has.  Under the Act, you must provide up to 10 weeks of unpaid family medical leave and your employee must be allowed to continue his health benefits while on leave at his own expense (continuation of group life and disability insurance must also be allowed). Obviously you could opt to continue to provide benefits for the employee at the employer’s expense too.

Before you change you policy to require your employee to pay the full cost of his health insurance, I would advise that you first discuss this option with your health plan carrier/broker to determine if your current summary plan description would allow the employee to pay the full premium while out on a leave of absence.

Once you hear from your broker and if your plan allows this, you should put in place a policy that specifically addresses the payment of health benefits while an employee is on a leave of absence. Finally, for extended leaves, COBRA rules kick in.

To summarize, you can mandate the employee to pay the full cost of the premium, as long as your plan document permits this. Assuming you opt to do this, create policy and communicate it to your workforce.

If you need expert advice, contact the HR Helpline. I provide practical operational advice, not legal advice, on how to address all your difficult employee issues. 

Other posts you might want to read:

  1. Compliance: 6 Problem Areas For Employers
  2. Affordable Care Act: What’s Delayed and What’s Not
  3. HR HelpLine: When You Need Expert Advice
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