Human Resources & Safety -Cafeteria plan payments during FMLA leave

Cafeteria plan payments during FMLA leave

An employer must continue to make cafeteria plan health payments for an employee taking unpaid leave under the Family and Medical Leave Act (FMLA), says a recently released Department of Labor opinion letter.

A city offered its employees a cafeteria plan, allocating a certain sum of money to each employee per month to pay the premium for one of the city’s health plans. The balance of the allotment could be used, at the employee’s option, to provide dental/disability/life insurance or compensation.

The city had not been providing the cafeteria plan allotment for workers on unpaid FMLA leave, and a union challenged the practice. The city contacted the DOL for an opinion, asking whether the FMLA requires the city to continue cafeteria plan health payments for an employee on unpaid FMLA if city policy says all employees on unpaid leave of any kind must make their own group health coverage payments. The city believed that if it paid the allotment for an employee on unpaid FMLA leave, it would be discriminating against employees on other types of unpaid leaves whose allotments are not paid.

In its opinion letter, the DOL responded that the cafeteria plan allotment had to be paid during the unpaid FMLA leave. The FMLA and its regulations state that an employer must maintain group health care coverage, whether or not provided through a flexible spending account or other component of a cafeteria plan. As a result, said DOL, employees taking unpaid FMLA leave must have that portion of their cafeteria plan allotment allocated to group health insurance, including dental, with premiums paid by the city in the same amount as paid prior to the start of FMLA leave.