This question comes from an Amsterdam Consulting Group client that has been in business for 15 years. They have 25 employees and they asked us, “How long should we keep contributing towards an employee’s health plan, when that employee is out on disability?” (see infographic)
In most cases, the decision is solely based on the discretion of you, the employer.
However, you need to be consistent with this policy and it needs to be the same for each employee. If this situation has never come up, decide now whether to offer continuation and, if so, for how long.
There is no standard requirement, but many employers who choose to continue benefits do so for 30 to 60 days when not required by law. Make sure you check your benefits plan documents and consult with your broker to ensure that this is not in conflict with the terms of the health insurance plan.
The only time this may not apply is in the case of a state or federally mandated leave, such as under the Family Medical Leave Act (FMLA) where benefits must generally be continued for the duration of the leave, usually about 12 weeks. Some state laws may even provide a more generous benefit continuation limit. Please remember though, FMLA rules only need to be followed by employers with less than 50 employees.
All the more reason to make sure your employee handbook has been prepared by professionals and vetted by your attorney.
Amsterdam Consulting is available to answer your Disability questions.
Call us with your questions or email Al Marino at firstname.lastname@example.org