Q: Can I require an employee on FMLA leave to utilize COBRA in order to continue health benefits while on leave?
A: No, an employer cannot require an employee who is on FMLA leave to use COBRA in order to continue their health coverage under the employer’s group health insurance plan. As long as that employee is on a qualified FMLA leave (and has not indicated that he or she will not be returning to work), the employer must continue paying the employer’s portion of the coverage premium as if the employee were actively working.
When an employee elects to take FMLA leave, this is not considered a qualifying event for COBRA purposes. FMLA actually requires you to continue providing coverage under a group health insurance plan under the same conditions as when the employee was working. For example, if you are paying 80% of an active employee’s health insurance premium, you must continue to pay 80% of the health insurance premium of an employee while he or she is on FMLA leave. If the 12 weeks of FMLA leave expires and the employee is unable to return to work, it is considered a qualifying event and your requirement to continue providing coverage under the same terms and conditions ceases. In other words, if an employee fails to return from FMLA leave when it expires, the employer can provide the COBRA notice and require the employee to utilize COBRA in order to continue health coverage. — CW