COBRA/FMLA Compliance

Recently, a court case ruled on the how FMLA, STD, and COBRA work.

The Family and Medical Leave Act (FMLA) ‘provides certain employees with up to 12 weeks of unpaid, job-protected leave per year. It also requires that their group health benefits be maintained during the leave.’ This act ‘applies to all public agencies, all public and private elementary and secondary schools, and companies with 50 or more employees. These employers must provide an eligible employee with up to 12 weeks of unpaid leave each year for any of the following reasons:

·         for the birth and care of the newborn child of an employee;

·         for placement with the employee of a child for adoption or foster care;

·         to care for an immediate family member (spouse, child, or parent) with a serious health condition; or

·         to take medical leave when the employee is unable to work because of a serious health condition.

Employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles. Whether an employee has worked the minimum 1,250 hours of service is determined according to FLSA principles for determining compensable hours or work.’

In the court case, an employee went on FMLA. Once FMLA had run out, their employer put them on STD without offering them COBRA coverage. At the end of STD, the employer offered the employee COBRA coverage. However, the carrier refused to reimburse the employer for medical expenses incurred during the employee’s STD coverage. The employer argued that the requirement to be on FMLA, work 40 hours a week, or be on COBRA was only a condition for initial eligibility, but the court ruled in favor of the carrier, and the carrier was not responsible for reimbursing the employer for the employee’s medical expenses incurred while on STD.

For more information on this case, check out Plan Sponsor. For more information of FMLA, check out the United States Department of Labor.