January 2012 will be a busy month for most California employers
as they work to comply with a number of new laws affecting employers and employees alike. One of these laws affects health coverage during maternity leave. SB 299
, effective January 1, 2012, amends Government Code Section 12945 (concerning Pregnancy Disability Discrimination and Pregnancy Disability Leave) and requires the continuation, at pre-leave levels, of health insurance benefits, for up to four months during a legally protected pregnancy disability leave.
More specifically, SB 299 requires all public agencies and private employers with five or more employees to continue to maintain and pay for health coverage under a group health plan for an eligible female employee who takes Pregnancy Disability Leave (PDL) up to a maximum of four months in a 12-month period. The coverage must be at the level and under the conditions that coverage would have been provided if the employee had continued in employment continuously for the duration of the leave.
Under the current pregnancy disability provisions of the California Fair Employment and Housing Act (FEHA), employers were only required to provide benefits for pregnancy leave to the same extent and for the same length of time as they would for other temporary disability leaves. Employers covered by the federal Family and Medical Leave Act (FMLA), meaning the employee had been employed for at least one year and had worked 1250 hours in the past 12 months and the employer employed 50 or more employees within a 75 mile radius, had to provide continuing coverage during the twelve weeks of FMLA leave. The new law requires group health insurance continuation coverage for all employers with five or more employees regardless of how they treat other temporary disability leaves and regardless of FMLA coverage. Even recently hired employees at smaller employers will be entitled to paid health benefits for up to four months of the leave provided the employee is otherwise eligible for the health benefits or becomes eligible during the leave.
Additionally, the law provides for the employer to be able to recover the premium amounts paid if:
(1) The employee fails to return from leave after expiration of the leave; and
(2) The reason for the employee not returning is not one of the following:
a. The employee is taking CFRA leave; or
b. The continuation, recurrence or onset of a health condition that entitles the employee to leave under PDL (such as the employee having medical complications relating to child birth) or other circumstances beyond the employee’s control.
This new law will have a significant impact on employers because employees who are ineligible for FMLA leave are eligible for pregnancy disability leave. Further, continued insurance coverage provided for pregnancy disability leave will not count against an employee’s right to continued benefits under the FMLA if she subsequently becomes FMLA eligible. It is important to note that it is unclear at this time what effect the federal Health Reform Law will have on the new law.
The Orange County and Riverside Employment Law
firm of Don Ho, LLP suggests that all employers review and revise their policies, procedures and forms relating to Pregnancy Disability Leave, and FMLA/CFRA in order to incorporate the new law. Training of personnel responsible for implementation of these leaves will also be necessary.
The full text of SB 299 can be found here