3509 / How are health-related benefits offered under a cafeteria plan affected by the Family and Medical Leave Act?
Under the 1995 proposed regulations, employers had to permit employees on FMLA leave to revoke an existing election of group health plan coverage (including a flexible spending arrangement, see Q 3515) under a cafeteria plan for the remainder of the coverage period.1 Under the 2001 final regulations, employers may require employees to continue coverage if the employer pays the employee’s portion of the coverage cost.2
Employees on FMLA leave are generally entitled to revoke or change elections in the same manner as the employees not on FMLA leave. Upon returning from the FMLA leave, the employee is entitled to be reinstated in the plan if the employee’s coverage terminated during the leave, either by revocation or nonpayment of premiums.3
Health FSAs
A health flexible spending arrangement (health FSA, see Q 3515) is subject to the same general rules as a traditional cafeteria plan, as discussed above.