What if my employee is on FMLA?

Here's a breakdown of how these two benefits programs work together:

Let's start with a quick background:

• FMLA (Family and Medical Leave Act) gives eligible employees up to 12 weeks of unpaid, job-protected leave.
• ICHRA (Individual Coverage Health Reimbursement Arrangement) is a benefit funded by the employer that reimburses employees for their individual health insurance premiums and medical costs.

Key Rules to Know for FMLA Leave

Employers must continue ICHRA contributions during the leave. Just like with a traditional group health plan, employers generally need to maintain an employee's health benefits during their FMLA leave. For an ICHRA, this means the employer should continue making the HRA funds available at the same monthly amount.

Employees still pay their share. If you normally pay a part of your individual premium (the amount your ICHRA doesn't cover), you'll still need to pay that portion during your leave, even if it's unpaid.

You must keep your individual insurance active. Since an ICHRA reimburses individual health plans (not group plans), it's up to you to keep your policy active while on leave. If your policy lapses, the ICHRA can't be used.

What if an employee doesn't return? If an employee doesn't come back from FMLA leave, the employer might be able to recover the ICHRA contributions they made during the leave. This is similar to how they'd recover group plan premium payments. An exception is if the employee can't return for reasons beyond their control, like a continuing serious health condition.

A Few Important Things to Note

There isn't any direct DOL guidance that specifically covers ICHRA and FMLA together. Because of this, it's best for employers to follow the general FMLA rule of "maintaining equivalent benefits" and to chat with legal counsel.

Proof is still needed. Even while you're on leave, you'll need to show proof that your individual plan is active and your premiums are being paid to get reimbursed.

State leave laws, like California's CFRA or New York's PFL, might have their own set of rules or additional requirements.