Health Care Coverage for an Employee out on WC Leave

October 04 2022

Categories: Group Employee Benefits

Health Care Coverage for an Employee out on WC Leave

When an employee is on workers' compensation leave for an extended period due to a work related injury or illness, is the employer required to maintain the employee's group health coverage?  Many factors determine the answer including:

  • the terms of the group health plan

  • the applicability of federal law, including the Family and Medical Leave Act (FMLA) and COBRA

  • Employers should consider the following when determining their obligation to continue group health insurance.

If the employee is also on leave under FMLA or other state medical leave:

  • Health care coverage is protected under these types of leaves

  • Protections will run concurrently with the workers' compensation leave

  • The employee's health care coverage will continue under the same terms as prior to the leave

  • The employer continues to pay their portion of the health care premium

  • The employee continues to pay his or her portion of the health care premium

  • Employers cannot increase the portion of the employee premium because they are on FMLA leave

If the employee is not eligible for FMLA leave:

  • Eligibility requirements of the health care coverage will dictate

  • If the health care plan requires an employee to be working a determined number of hours to be eligible for coverage, with no exceptions for leave outside of FMLA, then

    • Being on workers' compensation leave will mean the employee will be working 0 hours, making them ineligible to participate in the health care plan

    • This would be considered a COBRA event due to a reduction in hours and COBRA should be offered if the employer is subject to COBRA (COBRA generally applies to group health care plans maintained by employers that had at least 20 employees on more than 50% of its typical business days in the previous calendar year)

If the group health plan does allow for coverage during such leaves of absence, the employer would follow those guidelines for keeping the employee on the plan and for how long.

Once FMLA or other state leaves are exhausted, the health care eligibility requirements should again be referenced.  If the employee is not able to return to work and is no longer eligible for coverage due to a reduction in hours, COBRA should be offered if the employer is subject to COBRA. 

Being aware of health care eligibility requirements for employees recovering from workplace injury or illness can help prevent potential legal action.

Contact Koppinger & Associates for information or questions regarding the interaction between work comp, FMLA, and continuation rights under COBRA.




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