Under California, law which became effective January 1, 2012, (see our Year End 2011 Newsletter), employers are required to continue to maintain and pay for health coverage under a group health plan for eligible female employees who take a Pregnancy Disability Leave (PDL) up to a maximum of four months in a 12-month period.
This new legislation was enacted along with companion legislation (SB 222/AB 210) that amends the Insurance Code to mandate that all individual health insurance policies must provide maternity coverage effective July 1, 2012.
The insurance benefits that must be provided to an employee out on Pregnancy Disability Leave (PDL) are at the same level and under the same conditions as if the employee had continued working during the leave period. If the employee was required to pay a portion of the premium prior to the leave, she must continue to contribute that same amount during the leave.
Below are Questions and Answers addressing the new legislation.
Q: Our company is small, only 13 employees. We have an employee going on PDL. Do we have to continue her health insurance benefits while she is on PDL?
A: Yes. All employers with five or more employees must continue health insurance coverage for the duration of the PDL.
Q: Our company has over 50 employees and is a covered employer for purposes of FMLA and CFRA. We have an employee who was disabled for four months of PDL. She did not return to work at the end of PDL, but instead is taking 12 weeks of baby bonding leave under CFRA. Are we entitled to recover our share of the insurance coverage premium that we paid during her PDL because she didn’t return to work?
A: No. The law specifically states that the employer cannot recover the premium amounts if the employee failed to return to work because she took additional leave afforded under the CFRA, such as baby bonding leave. However, the new law provides that an employer can, under certain circumstances, recover the amounts paid for the benefits if the employee fails to return to work.
For example, if the employee simply chose to accept another job at the end of her PDL leave, the employer might be able to recover the premium costs. Because the law is ambiguous as to what specific circumstances allow for cost recovery, employers are advised to consult with counsel prior to seeking cost reimbursement.