Health Insurance Maintenance During Massachusetts Paid Family and Medical Leave - Draft Regulations Issued
The Massachusetts Department of Family and Medical Leave (DFML) recently posted proposed changes to its Paid Family and Medical Leave (MAPFML) regulations. For the time being, these changes are presented as a “draft markup”, with DFML stating its intent to offer a public comment period and/or public hearing at dates to be announced in the coming weeks. The draft markup addresses the narrow issue of the maintenance of a covered individual’s health insurance during MAPFML leave.
Since 2021, the MAPFML has provided paid family and medical leave benefits to covered individuals in Massachusetts. In addition to financial payments, the MAPFML also secures certain job protection, anti-retaliation, appeal and health insurance maintenance rights for individuals who take MAPFML covered leave. We have posted about MAPFML benefits and leave rights at length in our prior posts: here, here, here, and here.
Health Maintenance Rights Under the Current Regulations
Currently, the MAPFML regulations provide that, “during the duration of an employee’s family or medical leave, the employer shall continue to provide for and contribute to the employee's employment-related health insurance benefits, if any, at the level and under the conditions that coverage would have been provided if the employee had continued working continuously for the duration of such leave.”
Draft Markup Expands Employer Options for Health Insurance Continuation During Leave
The draft markup expands an employer’s options for providing insurance during leave by proposing the following change: “during the duration of an employee’s family or medical leave, the employer shall continue to provide for;
and contribute to, or otherwise maintain the employee's employment-related health insurance benefits, if any, at the level and under the conditions that coverage would have been provided if the employee had continued working continuously for the duration of such leave.”
The draft markup goes on to provide that “the provision ‘otherwise maintain’ shall be interpreted broadly to encompass any method of benefit maintenance or approximation of benefits that permits an employee taking family or medical leave to maintain access to health coverage for the duration of the leave on the same or equivalent terms, including the employee’s costs for such coverage, such as premium contributions, co-pays, and deductibles.”
The draft markup further provides a number of non-exclusive examples for maintaining coverage, including:
The employer may continue to pay its portion of a group insurance plan premium, with the employee remitting the employee’s portion in accordance with the employer's uniformly-applied policies or practices.
The employer may provide COBRA or mini-COBRA coverage to an employee eligible for such coverage, and reimburse the employee for any amounts in excess of the health insurance premium previously paid by the employee.
Note: the taking of federal FMLA leave is not a COBRA-qualifying event unless and until the employee fails to return from FMLA leave. Employers should be mindful of FMLA rules if FMLA and MAPFML leave overlap.
Additional examples apply to employers who are parties to collective bargaining agreements which provide for participation in multi-employer health plans.
The draft markup makes clear that employers will not be required to provide for, contribute to, or otherwise maintain employment-related health insurance benefits for an employee who does not receive or is not eligible to receive such employment-related health insurance benefits when the employee’s family or medical leave begins. Nor, according to the draft markup, are employers required to provide for, contribute to, or otherwise maintain health insurance benefits for covered individuals who resign during a leave or are former employees when the covered individual’s family or medical leave commences.
While the changes signaled in the draft markup offer some flexibility as to the employer’s requirement to maintain coverage, some open issues remain, including:
Most employers make changes to their medical benefits programs from year to year in the ordinary course of business. Employers routinely adjust premium contributions, co-pays, and deductibles, change plan design offerings (e.g. switch from low deductible to high deductible health plan arrangements, or offer a new range of options), change benefits, and sometimes change carriers altogether. What are an employer’s obligations to an individual entitled to health insurance maintenance who is on leave when these changes take effect? Similarly, may an employee who was not participating in the employer’s benefit plans at the start of MAPFML leave elect benefits for a new plan year beginning during MAPFML leave?
Does “maintenance of health insurance” contemplate continuation of major medical coverage only? Or does the DFML intend that employers also offer maintenance of dental, vision, and other plans providing medical care beyond major medical coverage? Similarly, does the DFML require that employers make contributions towards health savings accounts?
If MAPFML benefits are paid under a private plan, may the employer withhold medical plan premiums from benefit payments?
If an employee fails to remit the employee’s share of premiums during leave, may the employer cancel coverage during the leave? If so, under what circumstances? Does the employer have any recourse for unpaid premiums?
The draft markup offers employers some additional flexibility for maintenance of coverage during MAPFML leave, but it is only a draft markup. Employers are encouraged to keep watch for more formal proposed changes and opportunities to comment.