Perspaylogo
Electing Leave Without Pay (Self-Pay) Coverage and Returning to Work
 Print  Email Share Bookmark & Share

General Information and Requirements

Updated 4/9/2009

Applicable to:

  1. Employee’s experiencing one of the events listed below and electing Leave Without Pay (Self-Pay) coverage or,
  2. Employee’s who have retuned to work from one of the listed events below and who have obtained eight or more hours of pay status during a calendar month.

Events:

  • Employees on authorized leave without pay from agency
  • Employees laid off because of reduction in force (RIF)
  • Employees receiving time-loss benefits under workers’ compensation
  • Employees called to active military duty
  • Employees on approved educational leave

Relevant Rule:

  • Employees and their covered eligible dependents may continue benefits by applying for Leave Without Pay (LWOP) coverage during an absence from work. Benefits that may be continued include any combination of medical, dental, and life insurance; only employees on approved educational leave may continue long-term disability insurance. (WAC 182-12-133)
  • Employee’s who have retuned to work from one of the listed events above and who have obtained eight or more hours of pay status during a calendar month may be eligible for the employer contribution toward benefits. (WAC 182-08-190)
    Note: For employees returning from Layoff, this would only apply if the employee returns to employment within the conditions outlined in their employer’s layoff procedures, rules, union contract, and/or Collective Bargaining Agreement.
  • Employees on Family Medical Leave (FMLA) who do not elect to continue life insurance coverage during their FMLA, upon return to work will be eligible for the amounts of coverage they had under the plan immediately prior to the leave. These employees would not be required to provide evidence of insurability to reinstate prior amounts of life insurance coverage. (Term Life & Accidental Death & Dismemberment Insurance Program brochure pg 17).
  • Life Insurance Coverage parts B, C & D that were reduced or not self-paid by the employee during LWOP will require the employee re-apply and provide evidence of insurability. (Term Life & Accidental Death & Dismemberment Insurance Program brochure pg 17).
  • Employer provided health care coverage should be continued for employees called to active military service for less than 31 days. For administrative efficiency in complying with the rule, agencies should maintain employer provided coverage until the end of the month in which the 30 days occurs. For example, if the employee was called to active military service on September 15th, employer health care coverage should be maintained until October 31st (RCW 73.16.053).

Important Cautions:

  • Employees who re-apply for life coverage that requires underwriting should have coverage amounts for which they are applying entered into PAY1. This coverage must “PEND” in PAY1 until ReliaStar has provided you with a Final Action Notice (FAN). The FAN will indicate if the coverage has been Approved, Denied, or the request was closed.
  • PAY1 does not have the functionality to know the difference in the enrollment for a new employee where coverage may not require evidence of insurability, from a return-to-work employee where coverage may require evidence of insurability.
  • You will need to check the system (A.45 Life Insurance Screen) upon data entry to verify that the coverage “pends” for approval. This means that the coverage did not move to the “current coverage” column, charge a premium, or enroll coverage that should not be enrolled without a Final Action Notice (FAN) from ING approving such coverage. Step by step instructions (26 KB)
Benefit... ...Going Out on Approved LWOP... ...Returning to Work
Medical & Dental Employer:
  1. Terminate employee PEBB benefits in PAY1 within 30 days from the date employment ends, or as soon as the employee’s end date is known.
  2. The termination effective date for all employees (except employees called to active military service) will be the end of the month in which the employee last had 8 or more hours of pay status.
  3. Military Duty:
    1. Employees called for less than 31 days, the termination date would be the end of the month in which the 30 days occurs. (RCW 73.16.053).
    2. For employees called for more than 31 days, the termination date will be the end of the month in which the employee last had 8 hours of pay status.
Employee:
  1. May self-pay to HCA for the same medical and dental plan they were covered under the day before going out on LWOP.
  2. Subscriber and dependents will have an independent right to choose coverage and may choose different options.
  3. Options include:
    1. Medical only
    2. Medical and dental
    3. Dental Only
  4. The employee may choose to change medical and or dental plans at the time they apply for self-pay due to a change that triggers a special open enrollment. Employees may also change plans during the annual open enrollment.
  5. Dependents that enroll in medical and or dental coverage will be enrolled in the same plans as the employee.
  6. Application must be made to HCA within 60 days of the postmark date of the Continuation of Coverage Notice sent to the employee by the Health Care Authority.
  7. The employee must make the first payment for continuation of coverage no later than 45 days after the date coverage was elected. This is the date the election form is received by the Health Care Authority.
Or
  1. Employees who have a spouse or qualified domestic partner (QDP) also covered by PEBB benefits, may enroll under the spouse or QDP’s medical and/or dental coverage as a dependent.
  2. A new Employee Enrollment/Change form must be completed and turned into the spouse or QDP’s personnel/payroll/benefits office within 60 days of PEBB coverage ending.
 Employer:
  1. Check PAY1 or inquire through the PEBB FUZE email system to see if the employee paid and continued coverage through HCA Continuation of Coverage (LWOP).
  2. If the employee self-paid, provide HCA with the date the employee returned to work.
  3. The effective date for coverage will be the first of the month in which the employee returned to work.
  4. Enroll subscriber and dependents in the same benefits (or waive status) that was in place before the employee left employment. If the employee changed medical or dental plans while on self-pay, reinstate the medical and dental plan the employee was last enrolled in while on self-pay.
Employee:
  1. Regains eligibility for the employer contribution with 8 or more hours of pay when returning to work.
Life Insurance Employer:
  1. No action required. PAY1 will automatically terminate life coverage when you enter the coverage end date in step #1 of the “medical and dental” section above.
Employee:
  1. May self-pay to HCA for the types of coverage the employee was covered under the day before going out on LWOP.
  2. May choose to continue all or parts of the life insurance coverage.
  3. Basic required if any optional coverage is continued.
Note: Part E cannot be continued if the employee is on active military duty. 		Employer:
  1. Inquire through the PEBB FUZE email system to verify amounts of life insurance coverage continued and paid up to date.
  2. If the employee self-paid optional coverage that was in place the day before going out on LWOP, and is paid up to date with HCA, reinstate coverage effective the first of the month in which the employee returned to work. (This includes B Basic spouse if the employee had spouse coverage).
  3. If the employee self-paid for a reduced amount of optional coverage, make sure coverage is re-applied for by providing evidence of insurability. (See “Important Cautions” referenced in the section above this chart).
  4. If employee chose not to pay for optional coverage, notify them that they must re-apply and provide evidence of insurability. This includes B Basic Spouse if the employee had spouse coverage. (See “Important Cautions” referenced in the section above this chart).
Note: Part E Accidental Death and Dismemberment and Part B Basic Dependent, can be added at any time and if not self-paid would not require evidence of insurability to reinstate upon return to work.

Employee:
  1. Regains eligibility for employer contribution with 8 or more hours of pay status when returning to work from LWOP.
  2. Must complete a new Life Insurance Enrollment form within 31 days of returning to work.
  3. If self-paid for a reduced amount of optional life coverage, must reapply and provide evidence of insurability to increase the coverage when returning to work.
  4. If self-paid optional life coverage at the same amounts prior to the day the employee went out on self-pay, the same coverage will be reinstated upon return to work without providing evidence of insurability.
  5. If chose not to pay for optional life coverage, must re-apply and provide evidence of insurability. This includes B Basic Spouse, B Supplemental Spouse, Part C and D. Part E Accidental Death and Dismemberment and Part B Basic Dependent, can be added at any time and if not self-paid would not require evidence of insurability to reinstate upon return to work.
Long Term Disability (LTD) Employer:
  1. No action required. PAY1 will automatically terminate LTD coverage when you enter the coverage end date in step #1 of the “medical and dental” section above.
Employee:
  1. Self-pay of Optional LTD is only an option for employees on educational leave or approved sabbatical.
 Employer:
  1. Reinstate coverage in place prior to the employee going out on LWOP.
  2. Effective date for optional coverage will be the first of the month following the date the employee returned to work.
  3. For educational leave employees who self-paid, the effective date will be the first of the month in which the employee returned to work.
Employee:
  1. Regains eligibility for employer benefits with 8 hours of pay status when returning to work from LWOP status.
Flexible Spending Account (FSA) through ASIFlex Employer:
  1. Contact ASIFlex for continuation of coverage rules and options.
Employee:
  1. Employees who have discontinued payments through their employer for the LWOP period may apply for Continuation of Coverage through ASIFlex to extend their period of coverage, so that they may claim expenses incurred after employer sponsored benefits end (see FSA/DCAP FAQ bullet below)
  2. Coverage must be applied for within 60 days from the date employer provided coverage ends.
  3. If the employee has a spouse or qualified domestic partner also covered by PEBB benefits, the spouse/QDP may change their election through ASIFlex. (See FSA/DCAP FAQ link listed below under Guidance Resources).
 Employer:
  1. Verify that premiums were paid for the period in which the employee was on LWOP by contacting ASIFlex or verifying with your payroll records.
  2. If premiums were paid for the period that the employee was on LWOP continue deductions upon return to work.
  3. If the employee did not continue paying premiums for the coverage, do not continue coverage. The employee may not be eligible. Note: Different rules apply to employees on FMLA or Military Leave. Contact ASIFlex for coverage rules and options.
Employee:
  1. Continues paying premium if eligible.
  2. If not eligible to continue coverage, can re-apply for the next coverage year during the annual open enrollment.

Guidance Resources

Forms

Rates

System Keying in PAY1

Common Questions and Issues

WAC References and their general subject matter

Audio Visual Aids