My Employee Is On An Extended Leave-Do I Continue Their Health Insurance?

8.6.2025

When an employee is out on an extended leave, it is not the employer who decides if the health insurance benefit can be continued, it is the law and the health insurance provider.

Leave protected by FMLA or NJFLA

If an employer is required, under law, such as the Federal Family and Medical Leave Act (FMLA) or New Jersey Family Leave Act (NJFLA), to continue health insurance while an employee is out, their health insurance must be continued pursuant to the same terms during active employment: the employer pays their portion and the employee pays their portion.

If the employee does not pay their portion of the health insurance during a protected leave, after certain steps are taken, it may be canceled. Alternatively, an employer can decide to pay the employee’s portion while the employee is out and seek reimbursement upon the employee’s return. If the employee does not return, the employer may seek reimbursement for the health insurance payments it  made during the employee’s protected leave.

When Leave Is Not Protected by FMLA or NJFLA

If an employee is out on a leave that does not require health insurance continuation as described above (such as a reasonable accommodation leave or some other leave such as a personal leave of absence), it is likely that that employee’s health insurance will have to be COBRA’ed. This usually occurs because the employee is not working the requisite number of hours that the employer’s contract with the health insurance carrier requires for that employee to receive health insurance.

If an employee takes a reasonable accommodation or personal leave, and the employer is unsure of its contract terms with the health insurance carrier regarding such leaves, it should contact the carrier to determine if COBRA applies. The decision isn’t up to the employer—it’s governed by the contract. Failing to place an employee on COBRA during a non-protected leave can expose the employer to liability for the employee’s medical expenses during or after the leave.

Unsure If Coverage Should Continue? Check Before You Risk Liability.

Continuing, or not continuing, insurance during a leave of absence is a complicated question.  Not taking the correct steps could lead the employer having to pay for health care costs.  If you have any questions, please reach out to a member of our Employment Law Team.

Tag: Family and Medical Leave Act

BLOG DISCLAIMER

The postings on this blog were created for general informational purposes only and do not constitute legal advice or a solicitation to provide legal services.  Although we attempt to ensure that the postings are complete, accurate, and current as of the time of publication, we assume no responsibility for their completeness, accuracy, or timeliness.  The information in this blog is not intended to create, and receipt of it does not constitute, a lawyer-client relationship.  Readers should not act upon this information without seeking professional legal counsel.

This blog may contain links to independent third party websites and services, including social media. We provide these links for your convenience, and you access them at your own risk.  We have no control over and do not monitor the content or policies (including privacy policies) of these third-party websites and have no responsibility for, and no liability with respect to, their content, accuracy, or reliability.  Unless expressly stated, we do not endorse any of the linked websites or any product, service, or publication referenced herein or therein.  We will remove a link to any site from this blog upon request of the linked entity.

We grant permission to readers to link to this blog so long as this blog is not misrepresented. This site is not sponsored or associated with any other site unless so identified.

If you wish for Wilentz, Goldman & Spitzer, P.A., to consider representing you, please obtain contact information from the Contact Us area of this blog or go to the firm’s website at www.wilentz.com.  One of our lawyers will be happy to discuss the possibility of representation with you. However, the authors of Wilentz blogs are licensed only in New Jersey and/or New York and do not wish to represent anyone who viewed this site in a state where the site fails to comply with all laws and ethical rules of that state.

Sign Up

Tracy Armstrong Photo

Tracy Armstrong
Co-Chair, Employment Law Team
Shareholder
732.855.6020