(a) In addition to the circumstances discussed in Sec. 825.212(b),
an employer may recover its share of health plan premiums during a
period of unpaid FMLA leave from an employee if the employee fails to
return to work after the employee's FMLA leave entitlement has been
exhausted or expires, unless the reason the employee does not return is
due to:
(1) The continuation, recurrence, or onset of a serious health
condition of the employee or the employee's family member which would
otherwise entitle the employee to leave under FMLA; or
(2) Other circumstances beyond the employee's control. Examples of
``other circumstances beyond the employee's control'' are necessarily
broad. They include such situations as where a parent chooses to stay
home with a newborn child who has a serious health condition; an
employee's spouse is unexpectedly transferred to a job location more
than 75 miles from the employee's worksite; a relative or individual
other than an immediate family member has a serious health condition and
the employee is needed to provide care; the employee is laid off while
on leave; or, the employee is a ``key employee'' who decides not to
return to work upon being notified of the employer's intention to deny
restoration because of substantial and grievous economic injury to the
employer's operations and is not reinstated by the employer. Other
circumstances beyond the employee's control would not include a
situation where an employee desires to remain with a parent in a distant
city even though the parent no longer requires the employee's care, or a
parent chooses not to return to work to stay home with a well, newborn
child.
(3) When an employee fails to return to work because of the
continuation, recurrence, or onset of a serious health condition,
thereby precluding the employer from recovering its (share of) health
benefit premium payments made on the employee's behalf during a period
of unpaid FMLA leave, the employer may require medical certification of
the employee's or the family member's serious health condition. Such
certification is not required unless requested by the employer. The
employee is required to provide medical certification in a timely manner
which, for purposes of this section, is within 30 days from the date of
the employer's request. For purposes of medical certification, the
employee may use the optional DOL form developed for this purpose (see
Sec. 825.306(a) and Appendix B of this part). If the employer requests
medical certification and the employee does not provide such
certification in a timely manner (within 30 days), or the reason for not
returning to work does not meet the test of other circumstances beyond
the employee's control, the employer may recover 100% of the health
benefit premiums it paid during the period of unpaid FMLA leave.
(b) Under some circumstances an employer may elect to maintain other
benefits, e.g., life insurance, disability insurance, etc., by paying
the employee's (share of) premiums during periods of unpaid FMLA leave.
For example, to ensure the employer can meet its responsibilities to
provide equivalent benefits to the employee upon return from unpaid FMLA
leave, it may be necessary that premiums be paid continuously to avoid a
lapse of coverage. If the employer elects to maintain such benefits
during the leave, at the conclusion of leave, the employer is entitled
to recover only the costs incurred for paying the employee's share of
any premiums whether or not the employee returns to work.
(c) An employee who returns to work for at least 30 calendar days is
considered to have ``returned'' to work. An employee who transfers
directly from taking FMLA leave to retirement, or who retires during the
first 30 days after the employee returns to work, is deemed to have
returned to work.
(d) When an employee elects or an employer requires paid leave to be
substituted for FMLA leave, the employer may not recover its (share of)
health insurance or other non-health benefit premiums for any period of
FMLA leave covered by paid leave. Because paid leave provided under a
plan covering temporary disabilities (including workers' compensation)
is not unpaid, recovery of health insurance premiums does not apply to
such paid leave.
(e) The amount that self-insured employers may recover is limited to
only the employer's share of allowable ``premiums'' as would be
calculated under COBRA, excluding the 2 percent fee for administrative
costs.
(f) When an employee fails to return to work, any health and non-
health benefit premiums which this section of the regulations permits an
employer to recover are a debt owed by the non-returning employee to the
employer. The existence of this debt caused by the employee's failure to
return to work does not alter the employer's responsibilities for health
benefit coverage and, under a self-insurance plan, payment of claims
incurred during the period of FMLA leave. To the extent recovery is
allowed, the employer may recover the costs through deduction from any
sums due to the employee (e.g., unpaid wages, vacation pay, profit
sharing, etc.), provided such deductions do not otherwise violate
applicable Federal or State wage payment or other laws. Alternatively,
the employer may initiate legal action against the employee to recover
such costs.
