Human Resource Blog

California Disability, Family Leave

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May an employer withhold their health insurance premium payment when an employee is on disability? Our business, situated in California, pays 100% of our employees’ health insurance premiums for full time employees. Can this employer contribution be discontinued when an employee is on disability leave or FMLA?

Another unrelated question is about discrimmination. It has been stated that a discrimination case could be made for an employer’s granting one employee to take unpaid leave for a short-term disability, but not allowing the same to another employee. Is it not possible to change the company policy on this or does the historical record prevail?

PS Thanks for this great website!

Thanks for two great questions!!

Under FMLA, a covered employer is required to maintain health insurance for the employee on the same terms as if the employee remained at work. That means the employer must continue to pay any portion of the premium that was paid in the past. In your case, that means the employer must pay 100% of the premium.  The compliance guide for FMLA is at http://www.dol.gov/esa/regs/compliance/whd/1421.htm#2i

FMLA does permit an employer to recover the cost of insurance premiums if the employee does not return to work after FMLA.

An employer can certainly change the company short term leave policy, but to avoid charges of discrimination, it should be done in writing with a clear start date. “Effective June 1, 2008 the company will no longer offer paid short term leave…” It’s wise to give notice to all employees shortly before the change. And, to be on the safe side, the change should not be retroactive. An employee who went on short term leave on May 25 should receive benefits until her leave ends.

The problem with discrimination and short term disability occurs particularly when pregnant women are not given the same benefits as other employees with a short term disability such as cancer or a heart attack. Or, when employees with similar circumstances are treated differently, without any formal change in policy.

Also be aware that the US DOL issued a number of changes to FMLA regulations on February 11, 2008 and that California has its own disability, family and maternity leave laws, which are the most extensive in the nation.