Leave should not quietly change who is eligible for benefits.
Plan eligibility rules, hours requirements and waiting periods interact with leave. Review them so a covered leave does not cause an unintended loss of coverage.
How eligibility rules and waiting periods interact with leave
Eligibility rules were usually written with an ordinary working employee in mind. Leave exposes the gaps: what counts as full-time when hours drop, whether a new waiting period begins when an employee returns, and whether sick time, paid leave or unpaid leave all count toward the hours requirement.
Several rules apply together. A plan may require a minimum number of hours per week, the ACA limits any waiting period to 90 days, and the carrier contract defines when coverage ends and who is active at work. Leave under the FMLA also has its own requirements for continuing group health coverage on the same terms.
The most common problem is a policy that says one thing while the carrier contract says another. If an employee’s hours fall below the minimum during a leave, the plan may end coverage while the handbook promises that coverage continues. An employee who returns after a long absence may be treated as a new hire under one document and as continuously covered under another.
We read the plan eligibility language, carrier contract and handbook side by side, and write a short summary of the rules for each situation: new hire, leave of absence, rehire, and change in hours. The final wording should be reviewed by counsel.
What to decide and where it connects
ESTA and Eligibility
How sick time affects group health eligibility.
Health Coverage During FMLA
What coverage continues.
Read the Parent Guide
FMLA rules for Michigan employers.
Questions about this topic
Does using sick time affect eligibility?
It can interact with hours requirements. Review how your plan counts hours.
Do waiting periods restart after leave?
That depends on plan terms and the length of the leave.
Who should review this?
We can review the plan documents. Confirm legal points with your employment attorney.
Ready? Send us your renewal, or talk it through with someone first. General information, not legal or tax advice.
Where these details come from.
U.S. DOL Fact Sheet 28: FMLA basics.
Michigan LEO: Earned Sick Time Act: State guidance on ESTA.
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