When employees take leave under the Family and Medical Leave Act (FMLA), maintaining their health benefits is required. However, collecting premium payments for these benefits can be challenging. BAS’ Leave of Absence Billing solution can help you easily and efficiently collect amounts due. Employers have several options for handling premium payments during FMLA leave. This article will explain these options and provide best practices to ensure compliance and smooth operations.
Options for Collecting Premium Payments
- Pre-Payments Before Leave
- Description: Employees pay their share of premiums before starting FMLA leave.
- Implementation: Arrange for employees to make lump-sum payments or increase payroll deductions in the period leading up to their leave.
- Considerations:
- Works well for planned leaves, such as scheduled surgeries or maternity leave.
- Ensure clear communication and documentation of payment arrangements.
- Pay-As-You-Go
- Description: Employees continue to pay their share of premiums on the regular schedule during their leave.
- Implementation: Employees can send payments via check, electronic transfer, or any other agreed method.
- Considerations:
- Suitable for shorter leaves or when employees have reliable income sources during leave.
- Establish a clear process for collecting payments and tracking them.
- BAS can easily manage payment during leave to get payments collected
- Catch-Up Payments Upon Return
- Description: Employees make up missed premium payments when they return from leave.
- Implementation: Arrange for catch-up payments through payroll deductions or lump-sum payments upon the employee’s return.
- Considerations:
- Good for employees facing financial difficulties during leave.
- Ensure employees understand their obligation to repay missed premiums and the repayment schedule.
- COBRA-Like Continuation Coverage
- Description: Employees are not on COBRA but treated as if they are on COBRA, paying premiums directly to the employer or plan administrator, like #3, above.
- Implementation: Follow procedures similar to COBRA, where employees pay premiums directly.
- Considerations:
- Can be complex to administer, requiring robust tracking and communication.
- Ensures continuous coverage for employees on extended leaves
- BAS can easily manage payment during leave to get payments collected
Best Practices for Collecting Premium Payments
- Clear Communication
- Provide Detailed Information: Explain premium payment options and procedures in your FMLA policy and during FMLA leave discussions.
- Written Agreements: Document payment arrangements in writing, signed by both the employer and the employee.
- Consistent Procedures
- Standardized Process: Establish a standardized process for collecting premiums, ensuring consistency and fairness.
- Employee Handbook: Include FMLA premium payment procedures in the employee handbook and other relevant materials.
- Flexible Options
- Individual Needs: Consider if you want to be flexible in accommodating individual employee needs and circumstances.
- Multiple Payment Methods: Offer various payment methods (e.g., checks, electronic transfers) to facilitate timely payments.
- Regular Monitoring and Follow-Up
- Track Payments: Implement a system to monitor and track premium payments during FMLA leave.
- Reminders: Send regular reminders to employees about upcoming payments and any missed payments.
- Legal Compliance
- Stay Informed: Keep abreast of federal and state regulations regarding FMLA and premium payments.
- Consult Legal Counsel: Work with legal counsel to ensure your policies and procedures comply with applicable laws.
Conclusion
Managing premium payments during FMLA leave is a difficult but important aspect of benefits administration. By understanding the available options and implementing best practices, employers can ensure continuous coverage for employees and compliance with FMLA requirements. Clear communication, consistent procedures, flexibility, and regular monitoring are key to successfully navigating this complex area.
For information about BAS’ leave of absence billing options, contact your account manager or solutions@basusa.com.
Benefit Allocation Systems (BAS) provides best-in-class, online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 can Integrate with any insurance carrier for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and many others), and integrate with any payroll system for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and many others).
