Continuing insurance coverage through FMLA, extended leaves, and terminations

As many employers discovered during the COVID-19 pandemic, one of the most complex components of leave can be whether an employee’s health insurance is continued throughout the leave or whether, according to the health insurance contract, it ends if an employee doesn’t meet certain minimum weekly hours worked. Issues of this type can occur during any extended leave, including accommodations under the Americans with Disabilities Act (ADA), during layoffs, or for personal leaves.

Extended leave

As a way to address concerns regarding coverage, insurance carriers may suggest putting specific time limitations on any leave that will be extended after Family and Medical Leave Act (FMLA) leave is exhausted. Because of FMLA requirements, insurance companies frequently extend eligibility for a 12-week period even though the employee isn’t working the required minimum weekly amount to qualify under insurance. The issue becomes complicated when the FMLA no longer applies.

When no FMLA or other state-mandated leave (such as pregnancy leave under Iowa Code 216) is involved, insurance companies don’t have the same limitations in terms of disqualification from insurance. Extended leave outside of the parameters of any kind of legally mandated leave can result in the employee being disqualified from coverage under the insurance policy, which isn’t a surprise you or your employee wants.