Compliance December 1, 2006

DoL: Teacher Dental Plan Included under FMLA

December 1, 2006 (PLANSPONSOR.com) - The US Department of Labor (DoL) has sided with a teachers' union in asserting that benefits under a stand-alone, self-insured group dental plan provided by a school district need to be maintained while an employee is on leave under the Family and Medical Leave Act (FMLA).
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Paul DeCamp, an administrator in DoL’s   Employment Standards Administration of the Wage and Hour Division, stated the department’s opinion in a letter released earlier this year.

According to DeCamp, the union’s argument was valid because:

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  • the dental plan, which provided a wide range of dental services, came within the FMLA’s definition of “group health plan” – that is, “a plan of, or contributed to by, an employer . . . to provide health care (directly or otherwise) to employees,” among other individuals.
  • the dental plan failed to meet regulatory criteria for exclusion from the definition in that employees did not purchase individual policies (the employer contributed 100% of the premiums) and the employer’s involvement was “excessive.” The school district negotiated the cost of premiums, employed a claims administrator to assist employees in handling disputed claims and had authority to grant exceptions for denied claims.

The school district generally paid the teachers’ dental premiums up to a maximum amount per month for 12 months, even though the work year only lasted from August through June. However, it did not maintain dental coverage during FMLA leave or during summer break if FMLA leave was taken near the end of the school year, arguing that the dental plan was neither part of nor a supplement to the major medical plan (which was subject to the FMLA).

Noting that the regulations required that “coverage during FMLA leave for . . . dental care [among other benefits] must be maintained during leave if provided in a group health plan, including a supplement to a group health plan,” the DoL stated that the school district now had to keep up coverage under its group dental plan for employees on FMLA leave as though the employees were continuously employed during the leave.

Not only that, DeCamp said, but the FMLA regulations require teachers on leave at the end of the school year to be provided with any benefits over the summer vacation that the teachers would normally receive if they were working at the end of the school year.

The letter is here .

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