(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 either a serious
health condition of the employee or the employee's family member, or a
serious injury or illness of a covered servicemember, 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 a covered 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 either a serious health condition
of the employee or employee's family member, or a serious injury or
illness of a covered servicemember, 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 or the covered servicemember's
serious injury or illness. Such certification is not required unless
requested by the employer. The cost of the certification shall be borne
by the employee, and the employee is not entitled to be paid for the
time or travel costs spent in acquiring the certification. 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 forms developed for these purposes (see
Sec. Sec. 825.306(b), 825.310(c)-(d) and Appendices B and H 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.
[73 FR 68092, Nov. 17, 2008]
