If an employee experiences a reduction in hours as a reasonable accommodation under the ADA, are they entitled to remain enrolled on the health plan?

The Americans with Disabilities Act (ADA) applies to employers with 15 or more employees and requires them to provide individuals with disabilities an equal opportunity to benefit from the full range of employment-related opportunities available to others. However, an employee that experiences a reduction in hours due to a reasonable accommodation would not be entitled to remain enrolled on the health plan if their reduction in hours drops them below the eligibility threshold. Under the ADA, the only exception for this would be if the employer allows non-disabled participants that drop below the eligibility threshold to remain covered under the plan.

If the plan terms are such that the employee loses eligibility due to the lower numbers of hours worked, the understanding would be that the employer would terminate their coverage in accordance with the plan terms (i.e., end of the month after or date of event) and would then offer the employee COBRA.

Although the general rule is as discussed above, there are also two other compliance concepts that the employer will need to consider. First, under the ACA’s employer mandate, an employer may not be able to drop the person from coverage if the employer utilizes the lookback measurement method and the person is in a stability period. The rules for change in status don’t always allow employers to immediately terminate coverage when someone experiences a reduction in hours. So, the employer should also analyze whether they must continue to offer coverage to this employee due to the employer mandate’s rules.

Second, if the employee’s disability would also entitle them to rights under the FMLA, they would be able to continue coverage based on the idea that they are taking intermittent FMLA. Remember that FMLA entitles employees to continued employment and benefits for a period of no less than 12 weeks per year. So, if their disability is also a serious condition or illness and they are eligible for FMLA, then FMLA could also entitle them to remain covered under the group health plan benefits.