By Danielle Capilla
Chief Com­pli­ance Offi­cer at Unit­ed Ben­e­fit Advisors

Question mark at the computer key

Ques­tion mark at the com­put­er key

Ques­tion: If an employ­ee of an applic­a­ble large employ­er takes an unpaid leave of absence (not Fam­i­ly and Med­ical Leave Act), what hap­pens to their ben­e­fit eli­gi­bil­i­ty dur­ing that time?

Answer: The answer depends on whether the employ­er is using the mea­sure­ment and look­back method of track­ing employ­ees or the month­ly method.

Mea­sure­ment and look­back: If the employ­ee is on an unpaid leave of absence and in a sta­bil­i­ty peri­od, the employ­ee must be offered cov­er­age through the sta­bil­i­ty peri­od. When the employ­ee’s hours are cal­cu­lat­ed dur­ing the con­tem­po­ra­ne­ous mea­sure­ment peri­od, the leave of absence will count as zero hours of ser­vice. If an employ­ee declined cov­er­age for a sta­bil­i­ty peri­od, and then has a leave of absence that is less than 13 weeks, upon return the employ­er is not oblig­at­ed to make a new offer of cov­er­age to the employee.

Month­ly: The employ­ee would not be cred­it­ed with hours of ser­vice. Once the employ­ee drops below 30 hours per week for the month, the employ­er does not need to offer coverage.

Employ­ers should note that unpaid FMLA is han­dled dif­fer­ent­ly and spe­cial rules apply for edu­ca­tion­al institutions.

Leaves of absence can make it dif­fi­cult for an employ­er to deter­mine if or how an employ­ee counts toward the applic­a­ble large employ­er (ALE) thresh­old of 100, as well as deter­min­ing if an employ­ee is con­sid­ered full time and must be offered cov­er­age. Request UBA’s ACA Advi­sor, “Per­fect Atten­dance! How to Han­dle Leaves of Absence under the ACA” which defines ser­vice hours, excep­tions, meth­ods for count­ing hours, FMLA, USERRA, and jury duty, unpaid leave, lay­offs, dis­abil­i­ty, con­vey­ing poli­cies, deter­min­ing ALE sta­tus, and cred­it­ing hours to employees.

Read more here …