The Essential Guide to Family & Medical Leave

chapter 9 | managing an employee’s leave | 195
• The employee makes the payment at the same time it would be due if the
employee were receiving continuing coverage through COBRA.
• The employee pays the premium in advance to a cafeteria plan (at the
employee’s option).
• The employee pays according to the same rules that apply to other
employees on unpaid leave, as long as those rules don’t require the
employee to pay the premium before leave starts or require the employee
to pay more than he or she would have to pay if employed.
• The employee pays in any manner agreed to by employer and employee.
For example, you might agree that the employee can prepay the
premiums by having a larger amount deducted each pay period prior to
taking foreseeable leave.
Whichever method you choose, you must give the employee advance
written notice of how and when the payment must be made. You can provide
this notice as part of the employee’s individual notice, covered in Chapter 7.
If the employee’s premium payment is more than 30 days late, you may
terminate the employee’s coverage. However, you must send the employee
written notice of your intent to do so. The letter must state that the payment
has not been received and that the employee’s coverage will terminate if
payment is not received by a certain date; this date must be at least 15 days
after you send the letter.
Policy alert
The date the employee’s coverage officially terminates depends, in part,
on your policies for other types of unpaid leave. If your company has an
established policy that allows it to terminate coverage retroactively to
the date of the missed payment, it may do so. If it does not have this type
of policy, it may terminate coverage effective 30 days after the missed
payment.
Here is a sample letter telling an employee that health insurance coverage
will terminate unless payment is received; you’ll find a blank form in
Appendix C.