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Question: Is it considered a furlough if a full time employee is receiving payment for benefit premiums while on leave until more work becomes available?


Answer: This could either be a furlough or a temporary layoff status, both of which are generally considered a form of “leave”.

Typically the difference between a furlough and a temporary layoff is that a furlough is for a definitive period of time and is pre-planned, such as furloughing employees during the last two weeks of the year, or one week during the summer, or one day a month, etc. It is a pre-planned action that is explicitly understood by both parties as a temporary arrangement in which the employee will not be working for a period of time, and will return. Think of it as a forced vacation, and sometimes employees are required to use their paid time off while other times it is completely unpaid. Employee benefits continue as normal and there is no separation of employment.

Whereas a temporary layoff usually occurs somewhat unexpectedly when there is a lack of work or a budgeting shortfall for a temporary, or sometimes an indefinite, period of time. A temporary layoff is usually treated as a temporary leave of absence, in the hopes they will be able to bring the employee back on within the given time period, usually lasting three to six months.

Check with the carrier regarding how long the employee can remain on the active benefits plan while furloughed or on a leave of absence.  There is no requirement or prohibition about paying the employer portion of the premiums while the employee is on furlough or layoff; however, the key is consistency in treatment for similarly situated employees. (Source)


Question: Is it considered a permissible mid-year election change qualifying event to add legally-married same sex spouses to a company’s group health plan?


Answer: The Internal Revenue Service (IRS) issued guidance with respect to federal tax law (including cafeteria plans and permissible election changes) following the Supreme Court’s ruling in United States v. Windsor.   The Department of Labor (DOL) has also issued guidance with respect to employee benefit laws, including ERISA and HIPAA special enrollment events.  Both the IRS and DOL guidance confirm that the terms “spouse” and “marriage” include same-sex couples legally married in any state or foreign jurisdiction that recognizes such marriages, regardless of where they currently live.  Therefore, the employee’s marriage (including same-sex marriage) is a qualifying event to add the spouse under any group health plan that is subject to ERISA or that is offered through a cafeteria plan.

On a separate note, certain states currently refuse to recognize same-sex marriages for purposes of their state laws which may include the state insurance code.  If the employer’s group insurance policy is issued in one of the no-recognition states, the employer may need to confirm handling of enrollment changes with the insurance carrier.


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