Employee Premiums while on leave

[Guest TamraCS]

Our plan allows cancellation of coverage due to non-payment of the premium (eei portion) in the event of non-paid leave. We currently cancel after 90 days of non-payment (they can be on certain type of leaves for up to one year) but are considering reducing the period to 30 days. Does anyone know of any rule/ regulation limiting how long a plan has to allow for payment of back due premiums?

[Guest kclark]

Proposed Regs. only address this situation if the leave is designated as FMLA. In this situation under the payment option of pay-as-you-go, payments can be taken on the same schedule as COBRA pymts. and terminated the same (30 days past due date); under employer's existing rules for pymt. on upaid leave or any other system voluntarily agreed upon between employer & employee.

If an FMLA and employee selects the "catch-up" payment option then the maximum time period for continuation of coverage must be agreed upon in advance. If employee fails to return on the agreed upon date, coverage may be terminated, but must be reinstated upon return.

If it is not an FMLA, then your LOA policy would prevail if this is addressed in your existing policy. Before you could change from 90 to 30 days, the policy would need to be amended.

I am unclear as to what is happening with employee's coverage during the 90 days of non-payment. Is employer continuing Coverage thru COBRA and paying premium? Is coverage still active?

Hope that helps.

[Guest TamraCS]

Thank you, kclark. I appreciate the response! In response to your question, we continue their active coverage while they are on leave.