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CWA HEALTH CARE REFORM UPDATE: Lay-offs, Disability, and FMLA Leave

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How are workers who have been laid-off, on disability, or on FMLA leave treated under health reform?

Under the Affordable Care Act, voluntarily or involuntarily terminated employees (including those that have been “laid off”) that are currently eligible for COBRA coverage through an employer will be able to buy coverage on the state based health insurance exchanges beginning January 1, 2014. Middle to low income workers will most likely find coverage on the exchanges more attractive than standard COBRA benefits due to the subsidies that will be offered there. Employers are not mandated to provide affordable coverage for terminated workers under the bill.

Currently, for the purposes of the employer mandate, workers on paid leave (such as vacation, illness or disability) will be treated the same as if the paid leave time were regular hours worked. Employers will be required to provide affordable coverage to those receiving more than 30 hours per week in paid leave.

The Family and Medical Leave Act requires employers to offer group coverage to employees on FMLA leave under the same conditions offered to all employees. It is unclear at this point, however, whether employers will be liable for penalties if workers on unpaid leave go to exchanges and receive subsidies. More regulations will be released this year that should clarify these rules.