(a)(1) In the absence of an established employer policy providing a
longer grace period, an employer's obligations to maintain health
insurance coverage cease under FMLA if an employee's premium payment is
more than 30 days late. In order to drop the coverage for an employee
whose premium payment is late, the employer must provide written notice
to the employee that the payment has not been received. Such notice must
be mailed to the employee at least 15 days before coverage is to cease,
advising that coverage will be dropped on a specified date at least 15
days after the date of the letter unless the payment has been received
by that date. If the employer has established policies regarding other
forms of unpaid leave that provide for the employer to cease coverage
retroactively to the date the unpaid premium payment was due, the
employer may drop the employee from coverage retroactively in accordance
with that policy, provided the 15-day notice was given. In the absence
of such a policy, coverage for the employee may be terminated at the end
of the 30-day grace period, where the required 15-day notice has been
provided.
(2) An employer has no obligation regarding the maintenance of a
health insurance policy which is not a ``group health plan.'' See
Sec. 825.209(a).
(3) All other obligations of an employer under FMLA would continue;
for example, the employer continues to have an obligation to reinstate
an employee upon return from leave.
(b) The employer may recover the employee's share of any premium
payments missed by the employee for any FMLA leave period during which
the employer maintains health coverage by paying the employee's share
after the premium payment is missed.
(c) If coverage lapses because an employee has not made required
premium payments, upon the employee's return from FMLA leave the
employer must still restore the employee to coverage/benefits equivalent
to those the employee would have had if leave had not been taken and the
premium payment(s) had not been missed, including family or dependent
coverage. See Sec. 825.215(d)(1)-(5). In such case, an employee may not
be required to meet any qualification requirements imposed by the plan,
including any new preexisting condition waiting period, to wait for an
open season, or to pass a medical examination to obtain reinstatement of
coverage.
