Unpaid LOA questions

[Guest helenw]

I am a TPA with a client who has an employee on an uppaid LOA (non-FMLA). The employer wants to know what to do if this employee submits claims to the cafeteria plan. I have read the material on the FMLA but I am still not clear on what should be done with claims submitted during the LOA. The employee has stated that she intends to return to work however the employer has doubts as to whether the employee will return or not.

Please tell me if I am wrong here but this is my understanding of this so far. If the employee terminates during the LOA, the employer makes the termination date the date the employee informs them she will not be returning to work and the employer is required to pay the employee claims dated prior to the DOT up to the election amount for the plan year. If the employee returns to work she has two options. One is to do a catch-up contribution and the other is simply to continue deferring the same amount as prior to the LOA, however the yearly election is reduced by the contributions missed during the LOA. Of course this just brought another question to mind--what about claims submitted that are dated during the LOA--it seems to me that once she returns to work and contributing to the plan that they can be paid. The last question is if she does return to work can she decide not to reenter the plan. If she doesn't reenter the plan, what claims can be paid and up to how much? Any help on this would be appreciated.