Two Department of Labor opinion letters recently restated the Department's view that employers cannot reduce or discontinue contributions to multiemployer and cafeteria health plans for an employee on Family and Medical Leave Act qualifying leave. DOL Opinion Letter, FMLA2006-2; DOL Opinion Letter FMLA2006-3-A. Significantly, the DOL letters state that the FMLA requires the continuation of the contributions even if the contributions would not be continued for employees taking non-FMLA leave.
Employer Contributions to Multiemployer Health Plans
The DOL issued FMLA2006-2 in response to a request for an advisory opinion from a multi-employer health plan about the requirement, under the FMLA, for employer contributions to the multiemployer health plan. The inquiring multiemployer health plan provides a "disability extension of coverage" for participants whose disability prevent them from performing their jobs. During the period of disability, the benefits for disabled participants are not funded from employer contributions, rather they are funded entirely from the plans general reserves.
The DOL noted that FMLA regulations require an employer to continue contributing to a multiemployer health plan on behalf of an employee on FMLA leave, unless the plan contains an explicit FMLA provision for maintaining coverage such as through pooled contributions by all employers party to the plan. 29 C.F.R. 825.211(b).
The Department's opinion assumed that the multiemployer health plan continues to provide group health insurance coverage for all employees who take FMLA leave for their own serious health conditions and that the health plan provides benefits through its disability extension of coverage rules which require no current employer contributions. Based upon these assumptions, the DOL opined that, "if these [coverage] rules do apply to all employees taking FMLA-covered leave for any condition that meets FMLA's definition of a serious health condition, 29 C.F.R. 825.211(b) would not require the employer to make contributions on behalf of the employee using FMLA leave."
The DOL further explained that the FMLA would require the employer to continue contributions to the multiemployer plan for employees with a qualifying FMLA serious health condition that does not meet the plans definition of disability and, accordingly, would fall outside the plans method for continuation of group health benefits. Also, employers would be required to make contributions to the plan for employees who take FMLA leave for other qualifying reasons, such as the birth and care of a newborn, because the plan would have no method for expressly maintaining group health insurance coverage for employees during their FMLA leave for these qualifying reasons.
Employer Contributions to Cafeteria Plans
The second opinion letter, FMLA2006-3-A, responded to a city and a union that requested an interpretation regarding the application of the FMLA to a cafeteria plan under which the city allocates all or a portion of an employees benefit plan allotment to pay for group health insurance.
The city policy at issue required employees on unpaid leave of any kind to cover their own group health coverage payments and precluded accrual of additional benefits during unpaid leave. Although the city paid the group health insurance premium during a period of unpaid leave, it required employees to repay the city for the premium payments upon the employees return to work. City policy also required that employees exhaust all accrued paid leave before taking unpaid FMLA leave, and when FMLA leave was unpaid leave, no cafeteria plan allotment was provided during the leave. The city argued that if it paid the cafeteria plan allotment for employees on unpaid FMLA leave, it would be discriminating against employees on other types of unpaid leave whose cafeteria plan allotments were not paid.
The DOL stated that employees taking unpaid FMLA leave must have that portion of their cafeteria plan allotment allocated to group health insurance premiums paid by the city in the same amount as paid prior to the start of FMLA leave. Moreover, the city may not recover such payments for periods of FMLA leave. Thus, the DOL indicated that the FMLA requires the continuation of the contributions even if the contributions would not be continued for employees taking non-FMLA leave.
Regarding benefits other than group health insurance, the DOL stated those benefits are determined by the employers established policy for providing such benefits when the employee is on other forms of paid or unpaid leave. The FMLA does not require the maintenance of benefits other than group health insurance during a period of leave. However, at the end of an employees FMLA leave those other benefits must be resumed in the same manner and at the same levels as provided when the leave began, and subject to any changes in benefit levels that may have taken place during the period of FMLA leave. 29 C.F.R. 825.215(d)(1). Thus, the DOL noted that as a practical matter, some employers find it necessary to continue payments to maintain such benefits during the period of FMLA leave in order to restore employees to equivalent benefits upon return from FMLA leave. In that case, the employer may recover the employees share of those payments when the employee returns from leave.
The complete listing and links to the DOL's FMLA opinion letters is posted on the DOL's website at http://dol.gov/esa/whd/opinion/fmla.htm.