Caregiver support, sick time and paid leave: how they connect to your health plan and your policies.
The leave laws that already apply, which paid-time programs interact with health coverage, what caregiver support employers can add and how to keep premiums and eligibility straight during any absence. Written for the owner or HR lead.
The Leave Laws Most Employers Meet
Several overlapping laws shape leave, and they affect health coverage during an absence.
Federal FMLA
Eligible employees of covered employers get job-protected leave, and the group health plan must continue on the same terms during that leave. Coverage and employee contributions generally stay the same as for active employees, so make sure payroll and the carrier know when leave starts. Ask counsel to confirm whether an employee qualifies and how the leave is counted. Our free leave of absence benefits cost calculator turns this into dollars for your plan.
State Sick Time Laws
Michigan has an earned sick time law with amendments that took effect in 2025. Check the current rules for your size and your locations. These laws can differ on who is covered, how time is earned and what an employer must post or track. Review them with counsel and update your handbook, since a general policy may not match what the law requires for your workforce.
Local and Multi-State Rules
Employers with staff in other states may face different leave rules in each location. Keep a list of the states and cities where your employees work, and have counsel check each one for leave rules. A single national policy usually needs exceptions, so decide how you will handle them and tell managers.
What Happens to Coverage During an Absence
Leave and coverage rules interact, and the difference between paid and unpaid leave matters.
Paid Leave Keeps Payroll Deductions Running
Employee premiums continue through payroll as normal while someone is on paid leave. Check that the payroll system keeps taking deductions on schedule and that any pay-period changes do not cause a missed premium. Employees on paid leave can be surprised by changes to net pay, so remind them what to expect.
Unpaid Leave Needs a Plan
For unpaid leave the employee needs a way to pay their share, such as direct billing, and a written arrangement for it. Send the employee a letter before the leave begins that explains the amount owed, the due date and what happens if payment is late. Have counsel review the arrangement so it fits your plan terms and applicable law.
Eligibility Hours Can Drop
A long leave can change an employee’s hours and affect their status for the ACA or the plan’s eligibility rules. Check the plan document and your ACA tracking rules before changing anyone’s status, because the effect of leave on eligibility depends on the facts. Tell the employee in advance if coverage could change when they return.
Ways to Help Employees Who Care for Others
Many employees care for a child, an aging parent or a spouse, often alongside a full-time job.
Dependent Care Benefits
A dependent care FSA and employer childcare help can ease the cost of care for children and some adult dependents. Check the plan rules, including the election dates and the limits, before you promote the benefit. Employees often learn about these accounts too late, so mention them at enrollment and again when a life event occurs.
Employee Assistance Programs
An EAP can offer counseling and referral help for caregivers, including elder care resources. Remind employees that EAP services are usually confidential and available to family members. Many people do not use them because they do not know about them, so promote the program in leave paperwork and manager conversations.
Flexible Scheduling
Schedule flexibility is inexpensive and is often what caregivers value most. Options such as shifted hours, remote days or short-notice leave can help employees stay at work. Set clear guidelines so managers apply them fairly, and ask employees what would help them before you design a policy.
Employer-Paid Family Leave and Disability
Some employers go beyond the legal minimums.
Paid Parental or Family Leave
A paid leave policy can be self-funded or supported by an insured product. It is a policy decision with a measurable cost. Decide the length, the share of pay and who qualifies before you announce it, and check whether it runs alongside or on top of other leave. Ask your broker and counsel about funding options and rules in your states.
Short-Term Disability
Disability coverage can replace part of pay during leave for a medical condition, including recovery from childbirth. Check the waiting period, the benefit amount and how the policy defines a covered condition, since these vary widely. Explain to employees how disability, paid leave and sick time work together so they know what to expect.
Coordinate the Programs
Write down how paid leave, disability, sick time and FMLA run together, so employees get a clear answer. Make a simple chart showing which program pays first, how long each lasts and what the employee must do to apply. Review it with counsel, then share it with HR, payroll and managers so everyone gives the same answer.
Keep the Rules Written and Consistent
Most leave disputes start with an unclear or unevenly applied policy.
Handbook Language
The handbook should explain each type of leave and how they run together, in plain terms. Update the handbook whenever a policy or law changes, and have counsel review it. Avoid copying text from another company, because the rules and benefits may not match yours, and remove references that are out of date.
Train Managers
Managers handle the first conversation. Give them a short script on when to involve HR. Tell managers what they may say, what to avoid asking about medical details, and who to call. A short checklist helps them respond promptly and consistently, which also reduces the chance of an error.
Track Leave Dates for Benefits
Share leave start and end dates with benefits so premiums and eligibility stay accurate. Ask managers to notify HR as soon as they hear about a leave, and have HR confirm the dates with the employee. Late information can cause missed premiums, wrong coverage records and delayed notices.
The questions that come from leave and caregiving.
Six questions employers bring us about caregiver and paid leave benefits.
Does the health plan continue during FMLA leave?
Yes. The employer must maintain group health coverage on the same terms, and the employee generally pays their share.
Does paid sick time affect health coverage?
Not directly, but it keeps pay and payroll deductions running normally while the employee is out.
How should employees pay premiums on unpaid leave?
Set up direct billing or another arrangement in writing before the leave starts.
Can an EAP help caregivers?
Many EAPs offer caregiver counseling and referral help.
Do we need a paid family leave policy?
It is not required by federal law, but employers may choose to offer one. Check your state’s current rules.
Where should we start?
Map the leave laws that apply to you, then write one clear policy.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about leave and caregiver benefits, not legal advice. Leave laws vary by state and employer size, so confirm what applies to you with counsel.
Related guides.
Wellness Incentives and Tobacco Surcharges
Reward limits and the alternatives a plan must offer.
Military Leave and USERRA Coverage
What employers must continue and restore.
FMLA and Leave for Employers
Federal leave rules and benefits.
Benefits Continuation on Leave
Keeping coverage in place during leave.
Employee Assistance Program
Counseling and referral support for employees.
Unpaid Leave and Coverage Guide
Continuing benefits outside the FMLA.
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Laws and rules referenced
MCL 408.961 et seq. — Michigan Earned Sick Time Act (2018 PA 338).
29 U.S.C. § 2612 — FMLA leave entitlement: up to 12 workweeks of job-protected leave.
This page is general information, not legal or tax advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.
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