The quick answer is – the employer might be responsible. If that concerns you, read on…
The Family Medical Leave Act (“FMLA”) went into effect in August 1995 and changed the way that certain types of medical leave were handled. The FMLA created a complicated maze of regulations which left many employers confused. One common question still asked by employers today is “How do I to handle health insurance and insurance plan premium payments while an employee is on FMLA leave and not receiving a regular paycheck?”
Fortunately, this issue has been addressed by the FMLA. The FMLA has the following to say regarding the provision of health insurance and the recovery of insurance plan premium payments.
- Are employers required to provide health insurance to an employee on FMLA leave?
Answer:An employer is required to provide the same insurance coverage to an employee on FMLA leave as the employee would have received if not on FMLA leave. The same group health plan benefits provided to an employee prior to taking FMLA leave must be provided during the FMLA leave.
- Are employees required to pay their portion of insurance plan premiums while on FMLA leave?
Answer:Employees are required to pay their share of insurance premiums while on FMLA provided that such premiums were required to be paid by the employee prior to going on FMLA leave. If the applicable insurance premiums increase or decrease while an employee is on FMLA leave, the employee is required to pay the new insurance premiums.
- Are employers allowed to obtain payment from an employee for the employee’s portion of any required insurance plan premiums while on FMLA leave or recoup from the employee any such insurance plan premiums paid on the employee’s behalf by the employer during the FMLA leave period?
Answer: Employers are allowed to recoup the cost of or obtain payment from an employee on FMLA leave for all insurance plan premium payments made during the employee’s FMLA leave.
While, it is standard procedure to discuss with an employee any situation which requires such payments prior to the start of the FMLA leave period, it is not required.
However, the employer must provide the employee with advance written notice of the terms and conditions under which any such payment or repayments must be made and must follow all other applicable federaland statelaws, including those regarding wage deductions. The parties may go about recovering the costs under any arrangement voluntarily agreed to by both parties, as long as the agreement is in writing and it indicates the timing and amounts of any deductions to be made from the employee’s paycheck.
- Is there a limitation placed on the amount of money that an employer can withhold from an employee’s paycheck?
Answer:If the employer and employee enter into a voluntary agreement, there is no limitation on the amount which can be withheld from the employee’s check.
However, if the employee refuses to pay for their portion of the insurance plan premiums, the employer is required to go to court and obtain a judgement. Once a judgment is obtained, an employer is able to garnish the employee’s wages and recoup the insurance plan premiums.
If the agreement is not voluntary and the deduction takes the form of a wage garnishment, both Federal and Illinois laws place limitations upon the amount that can be garnished. Illinois law is stricter than Federal regarding limitation on garnishments. Illinois requires that wage garnishments be taken from an employee’s disposable income, which is the income remaining after taxes and all other mandatory deductions are taken out. In accordance with Illinois law, the maximum that can be deducted from an employee’s wages is the lesser of the following: (i) 15% of the employee’s gross wages or (ii) the amount by which the employee’s disposable income exceeds the sum of the Illinois minimum wage amount ($8.25)(or the Federal minimum wage if it is greater than the Illinois minimum wage) multiplied by 45.
What is the bottom line?
If an employer is concerned that employees will not (or cannot) make the required insurance payments during leave, it is recommended that a policy be established where all employees are asked to sign an agreement prior to going on leave confirming that the company can deduct the required insurance policy premiums from their paycheck when they return. If the employee is unable to make the full required premium payment, a special agreement can be made where the employee pays a pro-rated amount while on leave and the remainder is withdrawn from their check once they return to work. It is extremely important that employer make it very clear that any such agreements are voluntary and that the request for FMLA leave is not contingent on signing the agreement.
Should you have any questions about the Family Medical Leave Act or how it can affect your business, please contact Waltz, Palmer & Dawson, LLC at (847)253-8800 or contact us online.
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