Department of Labor Issues Temporary Regulations on Group Health Plan Coverage During COVID-19 Leave
The Department of Labor (DOL) issued guidance in the form of temporary regulations on Monday, April 6, 2020, implementing the COVID-19 related emergency paid sick and family leave provisions of the Families First Coronavirus Response Act (FFCRA) and the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
These new paid sick leave and expanded family and medical leave requirements became effective as of April 1, 2020, and are set to expire on Dec. 31, 2020. They apply to private employers with fewer than 500 employees and certain public employers.
The regulations address details relating to COVID-19 related paid sick and family leaves, including an employer’s responsibility for maintaining an employee's group health coverage during the leave.
The requirement to maintain an employee’s health coverage is effective as of April 1, 2020. However, the DOL has stated that it will not bring enforcement action against employers who make good faith efforts to comply during a “non-enforcement period,” which ends on April 17, 2020.
Maintaining Coverage Under the Group Health Plan
Employers must continue the employee’s group health plan coverage on the same terms and conditions as though the employee did not take the leave and had remained continuously employed by the employer. This also applies to any benefits provided under a supplement to a group health plan, whether provided through a health FSA or other cafeteria plan component. In other words, employers may not take into consideration the employee’s leave for purposes of group health plan coverage.
Changes During Leave
An employee on paid sick or family leave must be entitled to participate in any new or modified benefit package option just as they would had they not been on leave. Employers must inform any employees on leave of any changes or additions to a benefit package option and provide them with the same options as if they were not on leave. This includes any changes in deductibles or premiums.
Paying for Coverage During the Leave
Employees taking leave must pay the same premium as before the leave. Any changes in the employee premium amounts are applied to employees on leave just as they would have been absent the leave. Where the employee is receiving pay sufficient to cover the cost of their portion of the premium, payments should continue via payroll deduction just as if the leave had not occurred. Where there is not sufficient pay to cover the cost, employers should use one of the methods available under the Family Medical Leave Act (voluntary pre-pay, pay-as-you-go, catch-up or a combination).
Reinstatement of Coverage
Employees who choose not to remain covered under the group health plan during the leave are entitled, upon returning to employment with the employer, to have their coverage reinstated on the same terms and conditions as prior to the leave without the application of any waiting period.
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