FMLA and Allowable Claims

[Guest DK Ellerson]

Does anybody know what rules apply to the reimbursement of claims submitted by an employee with a service date concurrent with their FMLA leave period? It's rolling around in my head that if a participant is on paid leave, and deductions are being taken out, they could be reimbursed. What if it's unpaid leave and they've chosen the catch-up option of repayment to their Health FSA? Would only claims prior to their leave date and after their return date be eligible?

Thanks in advance.

DK Ellerson

[papogi]

If they will be using the catch-up option, then FSA claims can't be held up. They will need to be paid during the FMLA period. If they stopped the account, and will be restarting the account upon their return and not using the catch-up option, then there is a window of non-reimbursement.

[Guest Carolynn]

Question - if the particpant stopped the account, is their annual election decreased by that amount, or does the employer have to make up the difference? I realize their period of coverage is affected, but what about the total election?

Thanks!

[Guest DK Ellerson]

Thanks for your reply.

That being the case, then I take it that the employer assumes the risk if any claims are paid during that time that exceed the total contributions to date, and then the employee opts not to return. Is there any ruling pertaining to FMLA & the catch-up option that requires the employee to pay back the employer for amounts reimbursed over the total contributed?

[papogi]

Carolyn: If the employee stops the account, then resumes the account when they return (because they elect to or the employer requires them to), they can either continue the same payroll deductions (thereby resulting in a lower total election) or they can increase deductions to make up the difference (thereby keeping the same election). They have the option.

DK Ellerson: Once the employee has made you aware that he/she is not returning, they are terminated. You can take the contributions for the covered period from any unpaid wages, vacation pay or profit sharing benefits. If there are none of those options, you don't have much recourse. You can certainly ask for the money back, but good luck there. Personally, I think employers should offer only the pay as you go option, or the pay as you go and the pre-pay option. The catch up option agreed upon in advance is the one where you can run into these issues.

[Guest DK Ellerson]

papogi: Thanks, again. Yes, I'm inclined to agree with you regarding the catch-up option. Even though the final regulations regarding this issue indicate this option is available, I assume that an employer could have it stated in their Plan Document that the only options available regarding FMLA would be pay as you go and pre pay. Thus eliminating the need to offer the catch-up option.

[Guest Carolynn]

Here's a related question - what if the plan is under 50 ee's and per the document isn't bound by FMLA. Who/what decides what the acceptable choices are when the employee goes on leave?

Thanks!

Carolynn

[papogi]

Without FMLA, an employer can pretty well do as they please as long as its provisions are documented and applied uniformly. Many small employers follow FMLA rules anyway (or most of the rules), but the provisions should still be documented in the SPD.