When an employee goes out on FMLA leave, one of the first questions employers ask is:
“Do we still have to pay our portion of their health insurance premiums?”
The short answer is yes — if the employer was contributing to the employee’s group health plan before the leave, those contributions must continue during FMLA.
But before diving into the rules, it’s important to clarify which employers are even subject to the FMLA.
Which Employers Must Comply with FMLA?
FMLA applies to:
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Private-sector employers with 50 or more employees within a 75-mile radius
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Public agencies (regardless of size)
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Public and private elementary and secondary schools (regardless of size)
If an employer meets those criteria and the employee meets the FMLA eligibility rules, then the employer must follow FMLA’s requirements — including the rules on continuing health coverage.
So What Happens to Health Insurance During FMLA?
Under the FMLA, employers must maintain group health plan coverage as if the employee were still actively working.
That means:
What About the Employee’s Share of the Premium?
If the employee normally pays a portion of premium through payroll deductions, the employer must figure out how to collect it during unpaid leave.
FMLA allows three approaches:
1. Pay-As-You-Go
Employee pays their share as it comes due (usually monthly).
2. Catch-Up Payments
Employer pays the full premium during leave, then collects the employee’s share when they return.
3. Prepayment
Employee pays ahead of time before going out on leave (rare, but allowed if the employee agrees).
Employers must communicate the payment method, timeline, and consequences in writing.
What If the Employee Doesn’t Pay Their Share?
An employer can terminate coverage for non-payment, but only after:
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Giving the employee a written notice
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Allowing a 30-day grace period
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Warning that coverage will end if payment isn’t received
Even then, coverage must be reinstated when the employee returns to work — without a waiting period or preexisting condition limitations.
What Happens When the Employee Returns From FMLA?
Health coverage must be restored as though the employee never left:
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No new waiting periods
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No new underwriting
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Same coverage they had before the leave
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Dependent coverage restored as well
What About Non-FMLA Leaves?
This is where employers often get tripped up.
These rules apply only to FMLA-protected leave.
If the employer grants a non-FMLA leave (e.g., personal leave, extended medical leave after FMLA ends), the employer’s contribution obligations depend on:
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The employer’s handbook or written leave policies
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Carrier rules
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Plan document provisions
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State leave laws (if applicable)
In most cases, employers can require the employee to pay the full premium during non-FMLA leave — but only if plan documents support that approach.
Key Takeaways
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Employers subject to FMLA must continue the same health insurance contribution they made before the leave.
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Coverage must remain active and identical.
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Employers must proactively manage how the employee will pay their share during leave.
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Coverage can only be terminated after proper notice and grace periods.
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Coverage must be fully restored upon return.