b' Wordw w w. w m i m u t u a l . c o mC AN I KEEP My Furloughed EmployeesBy David Leo, on MyGROUP POLICYduring thePresident ofCOVID-19 Pandemic ?WMI MutualInsurance Company& WMI TPAIof leaving someone In an effort to gently advise WMI policyholders of the dangerson a group health insurance policy after the individual (and/or his or her dependent) no longer qualifies as an eligible insured, I recently sent a memo to all of our insured groups. The memo (which is largely reproduced below) informed employers of the financial, legal, and even crimi-nal risks of defying the insurance policys eligibility requirements (particularly the active-at-work and legal spouse requirements), and leaving individuals on the health insurance even though they should be terminated.I still believe the advice I doled out in my memoby a licensed insurance company, or is it self-funded is sound; but as fate would have it, no sooner did Iand sponsored and administered by the employer? disseminate the memo than the world as we knew itThe Nature of the Employment Action: For many changed. As a result of COVID-19, many employerspeople caught in a reduction in force, it doesnt much have been forced to temporarily shut down their busi- matter whether their employment inactivity is deemed nesses or furlough employees. This has put many indi- a furlough or a layoff. The effect is the same: you dont viduals at risk of losing their health insurance cover- go to work and you dont get paid. However, since age, and it has led to many calls from kindhearted (butfurloughs are generally intended to be temporary and frantic) employers wanting to continue this valuablelayoffs are usually permanent, the nature and classifica-benefit for employees and their families during this timetion of the employment action can have important con-of great uncertainty and economic hardship. sequences when it comes to continuation of health ben-Whether an employer can leave employees on the groupefits. It should be noted, however, that it is the nature of insurance policy during the COVID-19 pandemic isthe employment action and not the label assigned to it not a simple question, and there is no one-size-fits-allthat governs employee status and continued insurance answer. There are, however, a few important factorseligibility. Rather than quibble about definitions, I am to consider: (1) Is the employment action a temporaryusing the term furlough to mean a temporary unpaid furlough or a permanent layoff; (2) Is the employeeleave of absence and the term layoff to mean a sepa-entitled to paid or unpaid leave under the Family andration of employment that is intended to be permanent.Medical Leave Act (FMLA) (as expanded under theThe FMLA: This federal law generally applies to recently enacted Families First Coronavirus Responseemployers with 50 or more employees, and it entitles Act (FFCRA); (3) Is the individual eligible to con- eligible employees to take unpaid leave for certain tinue coverage under COBRA or state extension laws;medical reasons for up to 12 weeks. During the leave, (4) Does the policy or plan document contain languagethe employee is entitled to continue group health insur-that would allow the employee to continue coverageance under the same terms and conditions as before during the pandemic without violation, and if not, canthe leave, and the employee must continue to make the plan be amended; and (5) Is the plan fully-insured 20 www.wpma.com / Summer 2020'