Legal

When COBRA and Workers’ Comp Collide

By Jon Hyman

Jul. 14, 2016

WF_WebSite_BlogHeaders-09

Every now and again I get a question from a client to which I don’t know the answer, or the answer surprises me. It doesn’t happen that often, and when it does I’m man enough to admit it.

I received just such a question. Must an employer continue the health insurance of an employee out of work with a workers’ compensation injury? 

The answer? It depends. (Did you expect anything else?) If facing this issue, ask yourself these two questions.

1. Is the employee on an FMLA or other statutorily approved leave of absence, which protects the employee’s health insurance?

Under the FMLA, if you provide an employee group health insurance, the employee is entitled to the continuation of such coverage during the FMLA leave on the same terms as if he or she had continued to work (including family coverage), provided that the employee continues to make his or her normal contributions to the premiums. So, in this case, follow the FMLA and continue coverage.

2. What does the plan say?

If the employer is not FMLA-covered, the employee is not FMLA-eligible, or the employee has exhausted available FMLA leave, then the employer will need to review the plan to determine coverage during a workers’ comp leave. Most plans have minimum-hours-worked requirements (i.e., “An employee needs to work __ hours during a week to be eligible for coverage.”). If that is the case, the workers’ comp leave will leave the employee working zero hours, rendering them ineligible for coverage. You will then issue a COBRA notice to the employee, since a “reduction of hours of the covered employee’s employment” is a “qualifying event” under COBRA. Otherwise, if your plan’s eligibility requirement permits coverage during a workers’ comp leave of absence, then follow the plan and continue covering the employee.

In the event coverage terminates, you can assure the employee that you are not engaging in sweep-the-leg tactics by leaving the work-related injury uninsured. Workers’ comp should continue to cover the injury-related medical expenses.

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. Comment below or email editors@workforce.com.

Jon Hyman is a partner in the Employment & Labor practice at Wickens Herzer Panza. Contact Hyman at JHyman@Wickenslaw.com.

About Workforce.com

blog workforce

We build robust scheduling & attendance software for businesses with 500+ frontline workers. With custom BI reporting and demand-driven scheduling, we help our customers reduce labor spend and increase profitability across their business. It's as simple as that.

Book a call
See the software

Related Articles

workforce blog

Compliance

Minimum Wage by State in 2022 – All You Need to Know

Summary The federal minimum wage rate is $7.25, but the rate is higher in 30 states, along with Washing...

federal law, minimum wage, pay rates, state law, wage law compliance

workforce blog

Legal

California’s push for a 32-hour workweek explained, and how to prepare

Summary: California is considering a 32-hour workweek bill for businesses with over 500 staff 4 day wee...

32 hour workweek, 4 day workweek, california, legislature, overtime

workforce blog

Legal

A business owner’s guide to restaurant tipping law

Business owners in the restaurant industry are in a unique position when it comes to employee tips. As ...

restaurants, tip laws, tipping