If an employee is injured on the job and goes out on workers’ compensation, must we continue their group health insurance coverage?

Before discussing an employer’s health insurance obligations for an employee on workers’ compensation, it is important to note that workplace injuries and the state requirements surrounding them are employment issues that are outside of our benefits compliance scope. Employers should continue to work within their state’s rules for administering workers’ compensation for an employee that is injured on the job. Those rules may even involve requirements for the employer to provide medical care to address the workplace injury.

We can, however, address the question of what should be done regarding the employee’s group health plan benefits. Specifically, the continuation of group health plan benefits during workers’ compensation depends on whether FMLA must be offered or the terms of the plan.

FMLA
FMLA applies to private employers with 50 or more employees for each working day in 20 or more workweeks in the current or preceding calendar year. It also applies to all public agencies and local educational agencies no matter the size (including public school boards, as well as public and private elementary and secondary schools). An eligible employee who is absent due to their own serious health condition is eligible for up to 12 weeks of unpaid leave. An eligible employee is one who has worked for the employer for at least 12 months, has worked at least 1,250 hours in the last 12 months, works within a 75-mile radius of 49 other employees, and has suffered a serious health condition. Note that an employee’s location for purposes of the 75-mile radius rule is the office to which the employee reports (which is an important distinction given the number of employees currently working remotely).

Importantly, FMLA applies any time an eligible employee is absent from work due to a serious health condition — even if that condition is work-related. This means that an employee who takes leave under workers’ compensation would be eligible for FMLA if the injury for which they are taking leave is a serious health condition, and they work for an employer that is subject to FMLA and are otherwise eligible under FMLA’s eligibility rules.

While on FMLA, the employer must give the employee an opportunity to continue benefits under the same conditions as if the employee were still actively at work. An employee only must pay their normal contribution amount. If active employees contribute to the cost of coverage, an employee on FMLA would as well. If the FMLA leave is paid, then the deduction would be taken as normal. If the leave is unpaid, other arrangements must be made for the premium. For employees who continue their coverage during an unpaid FMLA leave, the following payment options may be provided: prepay, pay-as-you-go and catch-up. The employee may also choose to discontinue coverage during FMLA.

Plans should be mindful of COBRA requirements too. For an FMLA leave, the qualifying event for COBRA would be a reduction of hours and would be triggered if the employee does not return at the end of the 12-week FMLA leave period. The event date would be the last day of the FMLA leave. Even if the coverage was terminated during the leave (for failure to pay premiums), COBRA is still not offered until the end of the 12-week leave period.

Non-FMLA
If FMLA does not apply (either because the employer is not subject to it or the employee is not eligible), then coverage should be terminated according to the employer’s and carrier’s policy for inactive employees on unpaid leave (typically 30-60 days). If active employees must work a certain number of hours per week to remain eligible, and there is no special provision for inactive employees on non-FMLA leave, then an employee on leave due to a work-related injury should be terminated from coverage if that threshold is not met. Then, depending on the circumstances, COBRA or state continuation would be offered for the reduction of hours.