Human Resource Blog

Company canceled insurance while on LOA

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Is it true that an employer cannot cancel your medical insurance, while you are on a leave of absence, if you did not receive and sign for a certified letter, informing you of the potential cancelation? I had sent my $ to keep my insurance going, but was instructed by HR that it may take a few weeks for them to receive it because it had to go through alot of hands before they would get it. Thus, my insurance lapsed according to them.

This will depend upon whether the LOA was FMLA or not. It’s true that an employee who is on unpaid FMLA leave cannot have his or her insurance cancelled, as long as the employee pays his or her portion of the premium on time.

The US DOL FMLA compliance guide is at http://www.dol.gov/esa/regs/compliance/whd/1421.htm

  

The Family and Medical Leave Act permits most workers to take up to 12 weeks of unpaid leave when they have a serious health condition. Continued health insurance coverage is a major provision of that law.

 

Normally an employee who pays the insurance premium sends it directly to the HR department. In some cases they are instructed to send it to the insurance company. It’s not clear in this case why that wasn’t true.

The employer can cancel the employee’s health insurance if the employee pays the premium 30 days late. The employer must inform the employee 15 days in advance that the insurance will be cancelled – however, that notification doesn’t necessarily have to be by certified letter.

In some cases the worker must be offered continued coverage under COBRA after cancellation.

Employees can report violations of the FMLA to the U.S. Department of Labor, since it’s a federal law.